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This question is an example question but i don't quiet understand. it's from cost and benefit course. Exercise 3: Cost-Effectiveness Analysis (30 points) Suppose that

This question is an example question but i don't quiet understand. it's from cost and benefit course.

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Exercise 3: Cost-Effectiveness Analysis (30 points) Suppose that the government has conducted an evaluation of two alternative hard drug control programs: A and B. The ndings from this evaluation are summarized in the following table: I I Policy A I Policy B I Full cost of the policy $1 million $3 million Number of people screened 10,000 10,000 Number of drug addicts correctly identied by 300 screening Number of identied drug addicts \"cured\" by 30 70 therapy segment of program Assume that the cost gures cover both the screening and treatment segments of the pro- gram and that the screening test never falser identies a nonaddict as an addict. If the government were to fund one and only one of these two programs, which program should it select? Defend your decision. In doing this, be sure to discuss the major issues that should be considered in arriving at a decision

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