Suppose that stricter emissions standards would reduce health-care costs by $70 million but increase the costs of fuel and emissions equipment by $40 million. is it sensible to tighten the emissions standards?

Question

Frida Lam

Business

19 March, 07:42

Suppose that stricter emissions standards would reduce health-care costs by $70 million but increase the costs of fuel and emissions equipment by $40 million. is it sensible to tighten the emissions standards?

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Gianna Kerr · Answer 1

This is asking for a cost-benefit analysis. This simply means look at the cost of the change and see if the benefit is greater than the cost.

In this case, the cost would be $40 million but there is a benefit (cost savings) of $70 million.

Since the benefit outweighs the cost, it is a good idea.