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| Questão | Responda |
| the COST-BENEFIT approach | If B(x)>C(x), do x; otherwise don't. When using this test, you should express B and C in ABSOLUTE euro terms. |
| RESERVATION PRICE | The minimum price. The price at which a person would be indifferent between doing x and not doing x. B(x)=C(x) |
| OPPORTUNITY COST | The value of all that must be SACRIFICED to do the activity. |
| SUNK COSTS | Costs that are beyond recovery at the moment the decision is made. These costs should be ignored in the C-B analysis. |
| MARGINAL COST | The increase in Total Cost that results from carrying out one additional unit of an activity. |
| MARGINAL BENEFIT | The increase in Total Benefit that results from carrying out one additional unit of an activity. |
| AVERAGE BENEFIT/COST | The Average Benefit/Cost of undertaking n units of an activity is the Total Benefit/Cost of an activity divided by n. |
| EXTERNAL COSTS | A cost that falls on people who are not directly involved in the activity. |
| POSITIVE QUESTION | A question about a consequence of specific policies or institutional arrangements. |
| NORMATIVE QUESTION | A question about what policies or institutional arrangements lead to the best outcomes. |
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