What Is Difficult About Using Cost-Benefit Analysis to Estimate the Level

question 8

Multiple Choice

What is difficult about using cost-benefit analysis to estimate the level of a public good that will maximize social welfare?

• A)The government cannot use cost-benefit analysis to estimate this.
• B)It is difficult to estimate the marginal costs of supplying a public good.
• C)It is difficult to estimate the marginal social benefits of supplying a public good.
• D)The costs of using it may make the provision of the public good prohibitive.