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A cost benefit analysis concludes that a nuclear power station project might be socially worthwhile, although it will take 10 years to bring into operation.

Why might a government decide NOT to undertake the project?
The answer is C . The government believes that the project has too high an opportunity cost.

Can someone elaborate why this is the correct answer

Reply 1

jgood

Probably as a nuclear power station project is very expensive so the opportunity cost is high - for example, government spending could be spent on education, health etc.
Also, the project takes ten years so the benefits have a large time lag. Therefore, the opp. cost in the short term (the next ten years) is the money that could be spent on things that would benefit people in the short term.