The Benefit-Costs Analysis (BCA) is based on the so-called hypothetical Pareto Improvement criterion. Pareto Improvement is the movement from state A to state B which makes at least one person of a society better off without making anyone else worse off. This also implies that
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market equilibrium cannot be reached.
there is an inefficiency in economy.
winners of a project cannot compensate losers of this project.
social costs and benefits are maximized
a project should be accepted only if all persons in a society are better off as a result of its implementation.