A cost–benefit study indicated that the Oldman Dam project in southern Alberta had a benefit– cost ratio of 4.9 (Marv Anderson and Associates, 1978: Table 5.2, p. 103). On the basis of this benefit–cost ratio, can you say whether investment in the Oldman Dam was worthwhile?

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$200 150 140 130 120 110 100 80 60 50 45 20 Bart loses area dcg 45 50 60 SMC 20+ 2Q Lisa gains area cdhg PMB 100 PMC = 20 + Q MD = Q Q-output per year