Question

How is Kaldor-Hicks Efficiency commonly used?

• A. For increasing profits in private sectors
• B. For determining equal distribution of resources
• C. In cost-benefit analyses for public policy decisions
• D. For reducing government intervention in the economy

Answer 1

Answer:

C. In cost-benefit analyses for public policy decisions

Kaldor-Hicks Efficiency is frequently applied in cost-benefit analyses, allowing policymakers to justify actions that yield a net gain in social welfare, even if some individuals may incur losses.