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Consider two potential public projects. The first one leads to a net benefit of 100 and allows the two citizens to attain a level of
Consider two potential public projects. The first one leads to a net benefit of 100 and allows the two citizens to attain a level of happiness U, = 10 and U2 = 12. The other project leads to a net benefit of 120, and allows for the two citizens to enjoy utility levels of U, = 9 and U2 = 11. Which of the two projects is likely to be implemented if traditional cost bencit analysis is applied? Which of the two should be implemented by if welfare is to be used as a criterion? a) In both cases the first, b) The first wins in terms of efficiency the second in terms of welfare, c) The second wins in terms of efficiency and the first in terms of welfare, d) In both cases the second
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