Suppose you were conducting a cost benefit analysis for an alternative that required products to be shipped cross-country by truck. The truck driver would be willing to work for $750 per week. The driver is actually paid $1000 per week. How much of this pay would be included as a cost in your cost benefit analysis? Choice 1 of 4:None. Wages should not be included in a cost benefit analysis. Choice 2 of 4:$250 Choice 3 of 4:$750 Choice 4 of 4:$1,000
Suppose you were conducting a cost benefit analysis for an alternative that required products to be shipped cross-country by truck. The truck driver would be willing to work for $750 per week. The driver is actually paid $1000 per week. How much of this pay would be included as a cost in your cost benefit analysis? Choice 1 of 4:None. Wages should not be included in a cost benefit analysis. Choice 2 of 4:$250 Choice 3 of 4:$750 Choice 4 of 4:$1,000
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Suppose you were conducting a cost benefit analysis for an alternative that required products to be shipped cross-country by truck. The truck driver would be willing to work for $750 per week. The driver is actually paid $1000 per week. How much of this pay would be included as a cost in your cost benefit analysis?
- Choice 1 of 4:None. Wages should not be included in a cost benefit analysis.
- Choice 2 of 4:$250
- Choice 3 of 4:$750
- Choice 4 of 4:$1,000
Expert Solution
Step 1
The cost-benefit analysis is used to check the profitability of various projects while making investments. The cost-benefit analysis inspects the ratio of the projected costs and the benefits of a project.
If the benefits of the project outweigh the costs, the project is considered profitable. If the cost outweighs the benefits, the project is considered not profitable.
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