If the construction of a new elementary school would create $5 million worth of benefits for citizens and cost $7 million to construct, then using the criterion of economic efficiency, the school
A) should be built.
B) should not be built.
C) results in a substantial improvement to the welfare of society.
D) should be built if it passes by a majority vote.

Question

Quizplus · Accepted Answer

The criterion of economic efficiency suggests that a project should only be undertaken if the benefits exceed the costs. In this case, the costs ($7 million) exceed the benefits ($5 million), so the school should not be built.

If the Construction of a New Elementary School Would Create