hmm can someone breifly explain wt is social (external) costs n social (external) benefits.....i mean wts the diff
and also cost-benifit analysis...plzz if someone answers it will b a big help
Thanks
the word social means something related to the economy
Social costs is a negative effect that will happen to the social enviroment as an effect from a business deision, social benefits however are the opposite obviously, it is the positive effect on the social envuroment as an affect from a business decision, cost-benefit anlysis is just like a table where the Social costs and benefits and the private costs and benefits (these are the positive and negative effects on the business it self from a business decision) so that we can evaluate if the desicion should be take or not
For example: A company will open a new factory in country X, construct a Cost Benefit analysis for this.
ANSWER: SOCIAL COSTS:
-possible pollution
-can destroy the natural bueaty of the land
SOCIAL BENEFITS:
-Decrease Unemployment
-Better economy as more products will be made and this increasing competition or variety for customers
PRIVATE COSTS:
-Cost of land
-Cost of labour
-Cost of new Machinery
PRIVATE BENEFITS:
-More profits
-Better reputaion of business
-Benefit from ecomies of scale (cost/unit falls)
THEN GIVE A REASONED CONLUSION OF WHETHER THE BUSINESS SHOULD BUILD ITS FACTORY OR NOT BASED ON THE CBA, THATS BASICALLY IT
ALSO, THE GOVERNMENT WILL CHOOSE IF THIS DECISION SHOULD BE TAKEN AS THEIR ARE SOCIAL BENEFITS AND COSTS,
I HOPE THIS HELPS
GOOD LUCK
