When it comes to determining the appropriate environmental project to select, the ________ link(s) benefit-cost analysis to our theoretical model of the economics of the environment.
A) equimarginal principle
B) socially efficient scale
C) social discount rate
D) economies of scale

Question

Quizplus · Accepted Answer

The socially efficient scale links benefit-cost analysis (considering the social benefits and costs of a project) with our theoretical understanding of the optimal level of environmental protection. This allows us to determine the appropriate scale of a project that maximizes net social benefits. The other options listed are relevant concepts in environmental economics, but do not specifically relate to the selection of environmental projects.

When It Comes to Determining the Appropriate Environmental Project to Select