Suppose That Policymakers Are Doing Cost-Benefit Analysis on a Proposal

question 166

Multiple Choice

Suppose that policymakers are doing cost-benefit analysis on a proposal to add traffic barriers to divide the flow of traffic in an effort to increase safety on a given highway.Which of the following statements is correct?

• A) The benefits are usually easier to measure than the costs.
• B) Because human life is priceless, any measure to increase traffic safety would generate benefits that outweigh the costs.
• C) Estimating the value of a human life is difficult but necessary in order to evaluate the proposal.
• D) Both a and b are correct.

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Definitions:

Product Differentiation

The process of distinguishing a product or service from others to make it more attractive to a particular target market.

Monopolistically Competitive

An economic setup in which various firms market products that are comparable yet distinct, granting them some control over the market.

Economic Analysis

The systematic approach to determining the optimal use of scarce resources, examining the costs and benefits of economic decisions.

Product Promotion

Activities undertaken by a company to increase awareness, create interest, and generate sales or acceptance of its products or services.