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Subjects · Leaving Cert Economics

Leaving Cert Economics: Cost-benefit analysis

How often Cost-benefit analysis comes up on the Economics papers, every year it was asked, and questions to try.

HL Asked on 5 of the last 5 Higher Level papers, most recently in 2025. banker

OL Asked on 1 of the last 5 Ordinary Level papers, most recently in 2025.

Cost-benefit analysis, Higher Level(7 marks)

Quick ones on Cost-benefit analysis.

(a)In a cost-benefit analysis, social cost equals…
  1. Private cost minus external cost
  2. Private cost plus external cost
  3. External cost only
(b)A council builds a greenway and nearby cafés earn more. For the council's project, the cafés' extra income is…
  1. An external cost
  2. A private cost
  3. An external benefit
(c)Using CBA, a government should go ahead with a public project when…
  1. Social benefits exceed social costs
  2. External costs exceed external benefits
  3. Private benefits exceed private costs
Show the answers

(a) Private cost plus external cost

(b) An external benefit

(c) Social benefits exceed social costs

Your turn: Higher Level questions on Cost-benefit analysis.

Higher Level

Asked on 5 of the last 5 Higher Level papers, most recently in 2025. banker

Every paper, year by year

YearWhere it came up
2025Q1
2024Q16
2023Q14
2022Q9
2021Q16

Links open the State Examinations Commission’s paper for that year.

More Cost-benefit analysis questions

Cost-benefit analysis, 3 marks

A council plans a car park on land it already owns. In a CBA, the cost of using that land is…

  1. Zero, as the council already owns the land
  2. The price the council paid for it many years ago
  3. The value of its next best use, such as housing
Show the answer

The value of its next best use, such as housing

CBA counts opportunity cost. Land already owned is not free: using it for parking gives up what it could otherwise provide, such as homes or a park.

Cost-benefit analysis, 3 marks

Why should a CBA identify who gains and who pays, not just the totals?

  1. Gains and losses always cancel out between groups
  2. A project can raise total welfare while harming some groups
  3. Only the costs that fall on the State itself matter in a CBA
Show the answer

A project can raise total welfare while harming some groups

Even with a net social benefit, some people can lose, e.g. residents beside a new road. Knowing who they are lets government compensate them or redesign the project.

Ordinary Level

Asked on 1 of the last 5 Ordinary Level papers, most recently in 2025.

Every paper, year by year

YearWhere it came up
2025Q3
2024Not asked
2023Not asked
2022Not asked
2021Not asked

Links open the State Examinations Commission’s paper for that year.

More Cost-benefit analysis questions

Cost-benefit analysis, 2 marks

In cost-benefit analysis, social cost equals?

  1. Private cost minus external cost
  2. External cost only
  3. Private cost plus external cost
Show the answer

Private cost plus external cost

Social cost is the full cost to society. It adds the cost paid by the producer or user (private cost) to costs carried by third parties (external cost), such as noise or pollution.

Cost-benefit analysis, 3 marks

A new bypass cuts commuters' journey times but brings noise to a village. The noise is?

  1. An external benefit
  2. An external cost
  3. A private benefit
Show the answer

An external cost

The villagers are third parties. They did not choose the bypass but they suffer its noise. That makes it an external cost, which a cost-benefit analysis must include.

Cost-benefit analysis, 3 marks

Using cost-benefit analysis, a public project should go ahead when?

  1. Social benefits are greater than social costs
  2. Its private costs to the builder are zero
  3. It makes a profit for the firm that builds it
Show the answer

Social benefits are greater than social costs

Cost-benefit analysis weighs all costs and benefits to society, not just money flows. If total social benefits are greater than total social costs, society gains overall.

Other Economics topics

All of Leaving Cert Economics