Cost-Benefit Analysis Is Important to Determine the Role of Government

question 133

Multiple Choice

Cost-benefit analysis is important to determine the role of government in our economy because

• A)the government should provide all goods for which the benefits exceed the costs.
• B)cost-benefit analysis identifies the possible gains to society from government provision of a particular good.
• C)markets for private goods cannot effectively assign costs and benefits.
• D)cost-benefit analysis is the best tool to identify market failures.