World Price System of Economic Analysis

Abstract

The previous chapter discussed the need to assess projects from a national position and introduced the use of different numeraire. However, the concept of opportunity cost used in the economic analysis of projects is more complex than that discussion implied. Benefits created or foregone by the activities of projects can only be defined in terms of specific objectives. Project analysis has generally taken government rather than individuals’ objectives as the basis for the definition of opportunity costs, with most attention given to three main objectives