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The Safe Drinking Water Act required the US EPA to establish action standards for lead in drinking water. The agency considered three options (labeled A,
- The Safe Drinking Water Act required the US EPA to establish action standards for lead in drinking water. The agency considered three options (labeled A, B, and C below) using Cost-Benefit Analysis techniques. Total Benefits and Costs for these three options are in the table below in millions of 1988 dollars. Option C is the least stringent policy, and Option A the most stringent.
Option | |||
A | B | C | |
Total Benefits | 68,957 | 63,757 | 24,325 |
Total Costs | 6,272 | 4,156 | 3,655 |
Benefit/Cost Ratio | 11.0 | 15.3 | 6.7 |
Marginal Benefit (MB) | |||
Marginal Cost (MC) | |||
MB to MC Ratio | |||
Net Benefits |
A. Fill in the rest of the table. To do this, note that the policies build on each other Option B includes Option C, and Option A includes both B and C (and something more).
B. Which option is the most efficient choice?
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