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:

Operating Profit Margin

A profitability ratio calculated by dividing operating profit by total revenue, reflecting the percentage of revenue that is left over after paying for variable costs of production.

Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets to generate sales or revenue.

Return On Assets

A financial metric that indicates how profitable a company is relative to its total assets, measuring how efficiently a company uses its assets to generate earnings.

Profit Margin

A financial ratio calculated as net income divided by revenue, indicating the percentage of revenue that is retained as profit after accounting for costs and expenses.