To Decide Whether a Public Good Should Be Provided, the Government

question 169

Multiple Choice

To decide whether a public good should be provided, the government needs to know:
(i) what the costs to society of providing the good are
(ii) what the benefits to society of providing the good are
(iii) what price people pay for the good in an actual market

• A)(i) and (ii)
• B)(i) and (iii)
• C)(i) only
• D)(i), (ii) and (iii)

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Definitions:

Present Discounted Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, used in discounting to calculate the present value of future earnings or obligations.

Future Income

Expected earnings or revenue that an individual or business anticipates receiving in the future.

Interest Rate

The percentage charged on the total amount of borrowed money or paid on saved or invested capital.

Interest Rate

The part of a loan that is taken as interest from the borrower, customarily presented as an annual percentage of the still unpaid loan.