A government carries out a cost-benefit analysis on the building of a new airport.
It calculates that the cost of constructing and running the airport will be less than the revenue the airport will generate. It also estimates that benefits to third parties will be greater than the cost to third parties.
Which reason might the government give for not building this airport?
1 )
The external costs exceed the external benefits.
2 )
The net private benefit is greater on another project.
The net social benefit is greater on another project.
4 )
The social costs exceed the social benefits.
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