It Is Often Important in Cost-Benefit Analysis to Distinguish Between

question 4

Multiple Choice

It is often important in cost-benefit analysis to distinguish between non-market values and direct values attached to direct use.Why is it important to include non-market values in an analysis?

• A)non-market values are easier to estimate than direct use values
• B)non-market values are more accurate than market values
• C)non-market values reflect supply and demand more accurately
• D)non-market values reflect the costs and benefits to society, not just to private individuals

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Definitions:

Indifference Curve

A graphical representation in economics of all combinations of goods that provide a consumer with the same level of satisfaction or utility.

Budget Constraint

The cap on the selection of consumption options accessible to a consumer, influenced by their income level and the pricing of commodities.

Utility Maximizing

A principle in economics where individuals or entities aim to achieve the highest level of satisfaction with their choices, given their resources.

Indifference Curve

Represents a graph that shows a combination of two goods that give the consumer equal satisfaction and utility, thereby making the consumer indifferent.