The search for the least costly way of providing a desired public good is referred to as which of the following?

a. contingent valuation    

b. revealed preference    

c. cost-benefit analysis                    

d. social discounting           

e. cost-effectiveness analysis

The accounting method that calculates costs solely by adding up what the government pays for inputs to a project and calculates benefits solely by adding up government revenues generated by the project is which of the following?

a. contingent valuation

b. cash-flow

c. cost-benefit

d. social discounting

e. present-value discounting

If an input is sold in a perfectly competitive market, its price is equal to which of the following?

a. its average cost

b. its opportunity cost

c. its cost-benefit ratio

d. its cash flow premium

e. Both a and b are correct.

If the present discounted value of $134 next year is $115 this year, then what is the implied annual rate of interest?

a.7.63%

b. 9.5%

c. 13.34%

d. 19%

e. None of the answers is correct

Suppose that you estimate the value of life by comparing the earnings and probabilities of death from working on a fishing boat in Alaska to the earnings and probabilities of death from working in a fish processing plant in Alaska. You find that a year of life is valued at $6 million. If risk-loving people take the jobs on the boats and risk-averse people take jobs at the processing plants, then what will be true of your estimate?

a. It will overstate by at least two times the value of a life for the average person.

b. It will overstate by an unknown amount the value of a life for the average person.

c. It will be approximately equal to the value of a life for the average person.

d. It will understate by an unknown amount the value of a life for the average person.

e. It will understate by at least two times the value of a life for the average person.