According to benefit-cost analysis
A) identification of the "acceptable" risk level is based on the criterion of allocative efficiency
B) the efficient risk level is found where the MSB and MSC of risk reduction are equal
C) the risk level associated with the maximum difference between TSB and TSC of risk reduction is allocatively efficient
D) all of the above
E) none of the above

Question

Quizplus · Accepted Answer

All of the choices correctly describe aspects of how benefit-cost analysis approaches the determination of an "acceptable" or efficient risk level. Allocative efficiency, the equality of marginal social benefits (MSB) and marginal social costs (MSC), and the maximization of the difference between total social benefits (TSB) and total social costs (TSC) are all criteria or outcomes associated with finding an efficient level of risk in the context of benefit-cost analysis.

According to Benefit-Cost Analysis