This quiz works best with JavaScript enabled. Home > Economics > Welfare Economics > Cost Benefit Analysis > Cost Benefit Analysis – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Cost Benefit Analysis Quiz 1 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The following are some definitions of risk, except A) Lost opportunities due to choosing something else. B) The opportunity to deviate as a result of something that happens. C) Uncertainty of the output produced in the future. D) Dangers, consequences, or consequences that can occur as a result of an ongoing process or future events. Show Answer Correct Answer: A) Lost opportunities due to choosing something else. 2. Benefits can also be referred to as ..... A) Pros. B) Cons. Show Answer Correct Answer: A) Pros. 3. Assume a worker can either cut grass or wash windows in a given day. It takes 5 hours to mow a one-acre lawn and 2.5 hours to wash all the windows in a house. When a worker chooses to wash the windows of four houses in a neighborhood, what is the opportunity cost of this decision? A) The pay the worker receives for washing the windows in the four houses. B) The pay the worker would receive for cutting one lawn. C) Cutting the grass at the same four houses. D) The pay the worker would have received from cutting the grass at two houses. E) The pay the worker would receive for cutting.25 lawns . Show Answer Correct Answer: D) The pay the worker would have received from cutting the grass at two houses. 4. This term means the expenses or the cons to making a business decision. A) Cost. B) Benefits. C) Analysis. D) None of above. Show Answer Correct Answer: A) Cost. 5. In which type of study, the consideration of a good or service depends on its attributes A) Human capital approach. B) Friction cost method approach. C) Contingent valuation. D) Discrete choice experiments. Show Answer Correct Answer: D) Discrete choice experiments. 6. Which benefit is intangible? A) Increased customer goodwill. B) Increased profits. C) Increased productivity. D) Increased efficiency. Show Answer Correct Answer: A) Increased customer goodwill. 7. Which of the following is an example of cost benefit analysis? A) Evaluating the cost of buying a new outfit versus the potential benefits of a good first impression. B) Analyzing the cost of a vacation versus the potential benefits of relaxation. C) Evaluating the cost of implementing a new software system versus the potential benefits of increased efficiency and productivity. D) Comparing the cost of a new car to the potential benefits of exercise. Show Answer Correct Answer: C) Evaluating the cost of implementing a new software system versus the potential benefits of increased efficiency and productivity. 8. Cost-Benefit Analysis is important to know for several reasons, except A) The need for quantitative and accurate calculations of all costs and benefits arising from a policy. B) With the development of science and technology, the choice of various policies (for certain purposes) becomes more and more numerous. C) Society is increasingly critical, demands for the "rationality" of a policy are increasingly high. D) Government agencies need to increase their capacity to improve the quality of the policies they make. Show Answer Correct Answer: A) The need for quantitative and accurate calculations of all costs and benefits arising from a policy. 9. A money-risk tradeoff study is an example of ..... study A) Friction cost. B) Human capital. C) State preference. D) Revealed preference. Show Answer Correct Answer: D) Revealed preference. 10. The amount of time it takes to earn back what you lost in a business decision is ..... A) Recovery period. B) Earning period. C) Lost period. D) Payback period. Show Answer Correct Answer: D) Payback period. 11. What is the purpose of cost benefit analysis? A) To determine the profitability of a project. B) To evaluate the environmental impact of a decision. C) To analyze the social implications of a project. D) To compare costs and benefits of a project or decision. Show Answer Correct Answer: D) To compare costs and benefits of a project or decision. 12. What is the definition of cost in cost benefit analysis? A) The amount of money or resources that must be wasted to achieve a particular outcome or benefit. B) The amount of money or resources that must be saved to achieve a particular outcome or benefit. C) The amount of money or resources that must be spent to achieve a particular outcome or benefit. D) The amount of money or resources that must be borrowed to achieve a particular outcome or benefit. Show Answer Correct Answer: C) The amount of money or resources that must be spent to achieve a particular outcome or benefit. 13. Several things that need to be considered in identifying the impact of government policies are, except: A) Don't just look at the benefits and costs from the financial side. B) The things included are those that are in accordance with the government's interests. C) It is not always easy to see the potential impact of a policy. D) It is not always easy to assess the "true value" of a potential impact. Show Answer Correct Answer: B) The things included are those that are in accordance with the government's interests. 14. Costs can also be referred to as ..... A) Pros. B) Cons. Show Answer Correct Answer: B) Cons. 15. What might happen if governments did not do a cost-benefit analysis? A) Not everyone would have a chance to vote. B) Thousands or even millions of dollars might be wated. C) Only the best choices would be available for the government. D) None of above. Show Answer Correct Answer: B) Thousands or even millions of dollars might be wated. 16. The main problem that is emphasized in Cost-Benefit Analysis is? A) Efficient use of production factors. B) Distribution of costs incurred and benefits obtained. C) Economic stabilization, both micro and macro. D) The benefits obtained must be greater than the costs. Show Answer Correct Answer: A) Efficient use of production factors. 17. What are BENEFITS? A) Things tha are hlepful or useful. B) Devices that give out a small amount of something one at a time. C) Something that makes life difficult, such as not having enough money or food. D) None of above. Show Answer Correct Answer: A) Things tha are hlepful or useful. 18. Egyptian pharaohs likely had to perform a cost-benefit analysis before making big decisions such as whether or not to build ..... A) Pyramids. B) Mosques. C) Ziggurats. D) Stele. Show Answer Correct Answer: A) Pyramids. 19. If the market is not perfect (not competitive), for example due to monopolies, taxes and subsidies, generally the type of price used in Cost-Benefit analysis is? A) Market Price (Market Price). B) Shadow Price. C) Consumer Surplus (Surplus Konsumen). D) Economic Surplus (Economic Surplus = Consumer Surplus + Producer Surplus). Show Answer Correct Answer: B) Shadow Price. 20. Some ways to identify risks include, except A) Historical data analysis. B) Determine assumptions. C) Survey and observation. D) Expert opinion. Show Answer Correct Answer: B) Determine assumptions. Next →Related QuizzesWelfare Economics QuizzesEconomics QuizzesCost Benefit Analysis Quiz 2Cost Benefit Analysis Quiz 3Cost Benefit Analysis Quiz 4Cost Benefit Analysis Quiz 5Cost Benefit Analysis Quiz 6 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books