Question 1

One of the steps in cost-benefit analysis is distinguishing time frames.

Accepted Answer

A) True 
 B)False

Question 2

Cost-benefit analysis is

Accepted Answer

A) a set of practical procedures for guiding pubic expenditure decisions. 
B) used by the private sector to determine whether certain projects should be undertaken. 
C) difficult when benefits and costs are hard to evaluate. 
D) mindful of changes over time. 
E) all of the above. 
A) a set of practical procedures for guiding pubic expenditure decisions. 
B) used by the private sector to determine whether certain projects should be undertaken. 
C) difficult when benefits and costs are hard to evaluate. 
D) mindful of changes over time. 
E) all of the above.

Question 3

The term "future value"

Accepted Answer

A) can be determined by inverting the formula for present value. 
B) is not used in modern public finance analysis. 
C) refers to the present value of future money. 
D) includes the shadow prices of all goods used in a project. 
A) can be determined by inverting the formula for present value. 
B) is not used in modern public finance analysis. 
C) refers to the present value of future money. 
D) includes the shadow prices of all goods used in a project.

Question 4

Risk is _________ a part of cost-benefit analysis.

Accepted Answer

A) never 
B) always 
C) unable to be calculated 
D) decided by others whether to be 
A) never 
B) always 
C) unable to be calculated 
D) decided by others whether to be

Question 5

The government's decision to reduce the number of accidental deaths in the home by 100,000

Accepted Answer

A) would be very easy to do. 
B) was tried before but found to be too cumbersome to be handled at the federal level. 
C) could be accomplished using several methods that need to be evaluated for costs. 
D) was never a good idea. 
A) would be very easy to do. 
B) was tried before but found to be too cumbersome to be handled at the federal level. 
C) could be accomplished using several methods that need to be evaluated for costs. 
D) was never a good idea.

Question 6

The value that society places on consumption that is sacrificed in the present is called

Accepted Answer

A) social marginal costs. 
B) social marginal damages. 
C) social rate of discount. 
D) social returns. 
A) social marginal costs. 
B) social marginal damages. 
C) social rate of discount. 
D) social returns.

Question 7

The term "present value" refers to the future value of present day money.

Accepted Answer

A) True 
 B)False

Question 8

Costs should always be evaluated before determining benefits.

Accepted Answer

A) True 
 B)False

Question 9

Unlike other methods,present value analysis indicates that a project should be undertaken if the NPV is greater than zero regardless the income distribution.

Accepted Answer

A) True 
 B)False

Question 10

Some people prefer more risky projects than less risky projects.But some people prefer less risky projects to those that are more risky.What explains this behavior?

Accepted Answer

This behavior is explained through prefe

Question 11

The internal rate of return is likely to lead to incorrect decisions.

Accepted Answer

A) True 
 B)False

Question 12

When the benefit-cost ratio of a project is greater than 1,the project should be considered.

Accepted Answer

A) True 
 B)False

Question 13

The U.S.government uses discount rates that lead to consistent outcomes.

Accepted Answer

A) True 
 B)False

Question 14

The value of a human life

Accepted Answer

A) can be estimated by potential future earnings. 
B) can be subjected to cost-benefit analysis. 
C) is an intangible that is hard to price. 
D) is all of the above. 
A) can be estimated by potential future earnings. 
B) can be subjected to cost-benefit analysis. 
C) is an intangible that is hard to price. 
D) is all of the above.

Question 15

Figure 8.1
-Refer to Figure 8.1 .If the demand curve can be characterized by the equation Q = 10 - P,how much increase in consumer surplus will occur when the price of avocados falls from $2.89 to $1.35?

Accepted Answer

The original consumer surplus

One of the steps in cost-benefit analysis is distinguishing time frames.

Cost-benefit analysis is

The term "future value"

Risk is _________ a part of cost-benefit analysis.

The government's decision to reduce the number of accidental deaths in the home by 100,000

The value that society places on consumption that is sacrificed in the present is called

The term "present value" refers to the future value of present day money.

Costs should always be evaluated before determining benefits.

Unlike other methods,present value analysis indicates that a project should be undertaken if the NPV is greater than zero regardless the income distribution.

Some people prefer more risky projects than less risky projects.But some people prefer less risky projects to those that are more risky.What explains this behavior?

The internal rate of return is likely to lead to incorrect decisions.

When the benefit-cost ratio of a project is greater than 1,the project should be considered.

The U.S.government uses discount rates that lead to consistent outcomes.

The value of a human life

Figure 8.1 -Refer to Figure 8.1 .If the demand curve can be characterized by the equation Q = 10 - P,how much increase in consumer surplus will occur when the price of avocados falls from $2.89 to $1.35?

Introduction

Tools of Positive Analysis

Tools of Normative Analysis

Public Goods

Externalities

Political Economy

Education

The Health Care Market

Government and the Market for Health Care

Social Security

Income Redistribution: Conceptual Issues

Expenditure Programs for the Poor

Taxation and Income Distribution

Taxation and Efficiency

Efficient and Equitable Taxation

The Personal Income Tax

Personal Taxation and Behavior

The Corporation Tax

Deficit Finance

Fundamental Tax Reform: Taxes on Consumption and Wealth

Public Finance in a Federal System

Filters

Exam 8: Cost-Benefit Analysis

One of the steps in cost-benefit analysis is distinguishing time frames.

Cost-benefit analysis is

The term "future value"

Risk is _________ a part of cost-benefit analysis.

The government's decision to reduce the number of accidental deaths in the home by 100,000

The value that society places on consumption that is sacrificed in the present is called

The term "present value" refers to the future value of present day money.

Costs should always be evaluated before determining benefits.

Unlike other methods,present value analysis indicates that a project should be undertaken if the NPV is greater than zero regardless the income distribution.

Some people prefer more risky projects than less risky projects.But some people prefer less risky projects to those that are more risky.What explains this behavior?

The internal rate of return is likely to lead to incorrect decisions.

When the benefit-cost ratio of a project is greater than 1,the project should be considered.

The U.S.government uses discount rates that lead to consistent outcomes.

The value of a human life

Figure 8.1 -Refer to Figure 8.1 .If the demand curve can be characterized by the equation Q = 10 - P,how much increase in consumer surplus will occur when the price of avocados falls from $2.89 to $1.35?

Introduction

Tools of Positive Analysis

Tools of Normative Analysis

Public Goods

Externalities

Political Economy

Education

The Health Care Market

Government and the Market for Health Care

Social Security

Income Redistribution: Conceptual Issues

Expenditure Programs for the Poor

Taxation and Income Distribution

Taxation and Efficiency

Efficient and Equitable Taxation

The Personal Income Tax

Personal Taxation and Behavior

The Corporation Tax

Deficit Finance

Fundamental Tax Reform: Taxes on Consumption and Wealth

Public Finance in a Federal System

Filters