It Is Inefficient for the Government to Charge a Price

question 56

Multiple Choice

It is inefficient for the government to charge a price for consuming public health information because

• A)too much of the information will be produced.
• B)the price cannot be set to cover all research costs.
• C)no one will be willing to pay to use this information.
• D)the cost of providing this information to an additional person is essentially zero.
• E)the marginal costs of producing it exceed the marginal benefits of using it.

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Definitions:

Annual Depreciation

The portion of the cost of a fixed asset that is expensed on the income statement annually over its useful life.

Internal Rate

A variation of the Internal Rate of Return (IRR), focusing on the rate at which a series of cash flows would result in a net present value of zero.

Payback Period

The length of time it takes for an investment to generate cash flows sufficient to recover its initial cost.

Payback Period

The length of time it takes for an investment to recover its initial outlay in terms of profits or savings, used as a measure of investment risk.