The United States Department of Energy is considering a number of different nuclear energy plants for different parts of the United States. The Department may build as many plants as it wishes, but the total amount it can spend for land takings and construction is limited to $490 billion. A consultant hired by the Department has provided the cost and benefit data shown in Table 1 below.

Table 1 Costs and Benefits of Various Nuclear Energy Plants

Costs (Land cost and Construction cost)
Plant No.	Land takings (billions of dollars)	Construction (Billions of dollars)	Benefits (Billions of dollars)
A	60	100	480
B	70	100	1020
C	80	100	720
D	100	100	1400
E	180	100	252
F	20	100	480

Which nuclear power plants would you recommend should be built? Why?

If you were an advisor to the Department of Energy, what questions would you ask the consultant regarding the information in Table 1? Why would you ask these questions?

What are the advantages and disadvantages of this method of policy evaluation?

Answer rating: 100% (QA)

To determine which nuclear power plants should be built we need to consider the costs and benefits associated with each plant and ensure that the tota... View the full answer