Exam 8: Cost-Benefit Analysis

Which of the following is the approach taken to ask individuals how they value an option they are not now choosing?

If an input is sold in a perfectly competitive market,its price is equal to its:

If the present discounted value of $134 next year is $115 this year,then what is the implied annual rate of interest?

Suppose you can take one of two summer jobs.In the first job as a flight attendant,with a salary of $5,000,you estimate the probability you will die is 1 in 40,000.Alternatively,you could drive a truck transporting hazardous materials,which pays $12,000 and for which the probability of death is 1 in 10,000.Suppose that you're indifferent between the two jobs except for the pay and the chance of death.If you choose the job as a flight attendant,what does this say about the value you place on your life?

If an individual has the option of spending $10,000 to reduce the probability of death and the individual chooses not to spend $10,000,this implies that the:

The revealed preference approach to valuing a life focuses on:

The county supervisor decides that a new community swimming pool should be constructed based on the projected construction and operating expenses as well as estimates of how much residents would be willing to pay for the pool.This approach reflects:

What is the present discounted value of $400 a year from now and $500 two years from now if the interest rate is 10%?

If the present discounted value of $85 next year is $80 this year,what is the implied annual rate of interest?

Which of the following is the approach taken to determine how individuals value an option by looking at their actions?

Suppose that a city in your state is trying to attract a sports tournament,which would entail spending a significant amount of money on marketing of the event and other costs that have no intrinsic value to residents of the city.The city leaders argue that hosting the sports tournament will increase commerce activity around the city because of the visitors who will be in town for the tournament.Consequently,they are lobbying you as the state governor to give them grants,which they say (credibly)is the only way they can afford to host the tournament.For your decision,should it matter whether it is a tournament between in-state teams or national teams? Explain.

Suppose the government can pursue up to three projects.The first has benefits of $300 and costs of $270; the second has benefits of $580 and costs of $460; the third has benefits of $90 and costs of $80.Suppose that it costs $0.15 for the government to raise $1 in revenues.Which project should the government pursue?

In which of the following circumstances is contingent valuation the only option to value the public good?

The accounting method that calculates costs solely by adding up what the government pays for inputs to a project and calculates benefits solely by adding up government revenues generated by the project is called the _____ accounting approach.

The county supervisor uses an estimate of how much residents pay to drive to the public swimming pool in the next county as an indication of how much a swimming pool is worth to county residents.This is an example of: