An important part of a cost-benefit analysis is identifying:

• A. the historical context of the market
• B. all relevant costs and benefits associated with a decision
• C. the political opinions of policymakers
• D. the moral values of the individuals involved

Answer: (B)

Verified step by step guidance

1. Understand that cost-benefit analysis is a systematic approach to estimate the strengths and weaknesses of alternatives used to determine options that provide the best approach to achieve benefits while preserving savings.
2. Recognize that the key part of cost-benefit analysis is to identify all relevant costs and benefits associated with a decision, which means considering every positive and negative effect that results from the decision.
3. Note that historical context, political opinions, and moral values may influence decisions but are not the primary focus of cost-benefit analysis itself.
4. Focus on listing and quantifying all costs (such as expenses, opportunity costs) and benefits (such as revenues, savings, or utility gains) that directly relate to the decision at hand.
5. Summarize that the correct identification of all relevant costs and benefits ensures a comprehensive evaluation, which is essential for making informed economic decisions.