The value of an input in its next best use is which of the following?

a. the cost-benefit ratio

b. the cash flow

c. the explicit cost

d. the marginal benefit

e. the opportunity cost

Suppose you want to estimate the value of life by comparing the earnings and probability of death from working on a fishing boat in Alaska to the earnings and probability of dying from working in a fish processing plant in Alaska. Which of the following would bias your estimate?

a. The processing plant smells worse than the boat.

b. The probability of losing a finger is greater at the processing plant.

c. Perceptions of risk may differ from actual risks.

d. Answers a, b, and c are correct.

e. Both b and c are correct.

Which of the following is the approach taken to determine how individuals value an option by looking at their actions?

a. contingent valuation

b. revealed preference

c. cost-benefit analysis

d. social discounting

e. cost-effectiveness analysis

The provision of public goods by a private market is characterized by what problem?

a. the holdout problem

b. the assignment problem

c. the free-rider problem

d. the irrationality problem

e. transaction costs and negotiating problems

Which of the following factors is likely to enable private market forces to provide more of a public good than it might otherwise provide?

a. large differences among individuals in their demand for the public good

b. little to no difference among individuals in their demand for the public good

c. altruism

d. Both a and c are correct.

e. Both b and c are correct.