All of the Following Are Pitfalls of Cost-Benefit Analysis of a Public

question 34

Multiple Choice

All of the following are pitfalls of cost-benefit analysis of a public good EXCEPT:

• A) When indirect benefits must be estimated there are strict standards which prevent the analysis from being "cooked" to show what its sponsors wish to show.
• B) Even though indirect benefits must be estimated no strict standards are used.
• C) An analysis can be "cooked" to show what its sponsors wish to show.
• D) The opportunity-cost approach to the social rate of discount may bias the analysis against worthwhile public undertakings.
• E) The sheer cost of performing a credible cost-benefit analysis makes the approach unfeasible for many public investment decisions.

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