How Would National Security Be Valued in Benefit-Cost Analysis

question 14

Multiple Choice

How would national security be valued in benefit-cost analysis?

• A)Public goods like national security are excluded from benefit-cost analysis because valuation of benefits from such goods is not possible.
• B)Goods like national security are valued at $0 since national security is not provided through private markets.
• C)Goods like national security are valued using surveys and indirect proxies based on market prices.
• D)The value of a public good like national security is the difference between the taxes paid to the government and the salaries paid to army personnel.
• E)The value of national security is equal to the difference between revenues and expenses in the government's defense budget.

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Definitions:

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