Cost-Benefit Analysts Often Encounter the Problem That Those Who Would

question 119

Multiple Choice

Cost-benefit analysts often encounter the problem that those who would benefit from government provision of a public good tend to

• A)overstate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to overstate the costs they would incur from the public good.
• B)overstate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to understate the costs they would incur from the public good.
• C)understate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to overstate the costs they would incur from the public good.
• D)understate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to understate the costs they would incur from the public good.

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Definitions:

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting the decrease in value over time.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from revenues.

New Bonds

Securities that have been recently issued, representing loans from investors to issuers such as corporations or governments with a commitment to pay interest and return principal at specified dates.

Cash Ratio

A liquidity ratio that measures a company's ability to pay off its short-term liabilities with its cash and cash equivalents.