This quiz works best with JavaScript enabled. Home > Finance > Economics > Welfare Economics > Cost Benefit Analysis > Cost Benefit Analysis – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Cost Benefit Analysis Quiz 2 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Unemployment benefits, Social Security, and Disability are all examples of services that are paid for by ..... A) Services. B) Consumers. C) Projects. D) Taxes. Show Answer Correct Answer: D) Taxes. 2. The Welch family has saved some money. They can spend it on a vacation to the Grand Canyon or build a swimming pool in their backyard. They decide to spend the money on a swimming pool. What is the opportunity cost of their decision? A) Money. B) Backyard. C) Swimming pool. D) Vacation. Show Answer Correct Answer: D) Vacation. 3. Which is NOT an example of a cost? A) Money for giving employees wages. B) Increased expenses. C) Increased efficiency. D) Money for giving employee benefits. Show Answer Correct Answer: C) Increased efficiency. 4. If calculations for all types of costs and benefits in CBA analysis are difficult, CBA analysis calculations can be done using the method? A) Tabel Input-Output (IO). B) Analytical Hierarchy Process (AHP). C) Data Envelopment Analysis (DEA). D) Econometrics. Show Answer Correct Answer: B) Analytical Hierarchy Process (AHP). 5. The purpose of sensitivity analysis in CBA is, except A) To assess what will happen to the results of the feasibility analysis of business activities if there are changes to the cost/benefit calculation. B) To find the feasibility of business activities based on past conditions. C) Testing the robustness of the results of a model or system to uncertainty. D) Increase understanding of the relationship between input and output variables in a system or model. Show Answer Correct Answer: B) To find the feasibility of business activities based on past conditions. 6. When the marginal cost is LESS than the marginal benefit of doing something, you should ..... A) Not do it. B) Do it. Show Answer Correct Answer: B) Do it. 7. Every state has the same sales tax rate/percentage. A) False. B) True. Show Answer Correct Answer: A) False. 8. What is a benefit that is difficult to assess financially? A) Intangibles. B) Increased profits. C) Decreased expenses. D) If it can't be assessed financially it's not a benefit. Show Answer Correct Answer: A) Intangibles. 9. You decide to spend all the money you saved on a new pair of expensive shoes. What is the cost of your choice? A) New shoes. B) All the money you saved. C) Showing off your new shoes. D) None of above. Show Answer Correct Answer: B) All the money you saved. 10. Marginal costs is A) The cost added by producing one additional unit. B) The change in revenue added by producing one additional unit. C) The additional cost. D) None of above. Show Answer Correct Answer: A) The cost added by producing one additional unit. 11. The national government gets most of its money from ..... A) Income tax. B) Sales tax. C) School tax. D) Property tax. Show Answer Correct Answer: A) Income tax. 12. National Parks are preserved with the help of ..... A) Animals. B) Roads. C) Schools. D) Taxes. Show Answer Correct Answer: D) Taxes. 13. Which of the following is a real-life application of cost benefit analysis? A) Determining the best color for a new product. B) Calculating the nutritional value of a food item. C) Evaluating the emotional impact of a marketing campaign. D) Determining the profitability of a new project or evaluating the economic impact of a new policy or regulation. Show Answer Correct Answer: D) Determining the profitability of a new project or evaluating the economic impact of a new policy or regulation. 14. Emelia has been invited to a sleepover at Chloe's house for this Saturday. Emelia has tickets to see her favorite band in concert that same night. She decides to give the tickets to her sister and go to Chloe's house. What is the opportunity cost of her decision? A) Seeing her favorite band. B) Spending time at a friends house. C) Chloe's house. D) A sleepover. Show Answer Correct Answer: A) Seeing her favorite band. 15. The total cost of Jeremiah's certificate program was $ 3, 500. He expects to earn an additional $ 2, 500 per year with the certificate. What is his break-even point? A) 6 months. B) 1.4 years. C) 9 months. D) 2 years. Show Answer Correct Answer: B) 1.4 years. 16. Minimum amount necessary for an individual to forego some good is called ..... A) WTP. B) WTA. C) WTB. D) WTY. Show Answer Correct Answer: B) WTA. 17. After conducting an ..... of the situation, the mayor decided which company to hire for the project. A) Estimate. B) Analysis. C) Instant. D) None of above. Show Answer Correct Answer: B) Analysis. 18. What factors should be considered in cost benefit analysis? A) Time value of money only. B) Expected benefits only. C) Initial cost only. D) Initial cost, expected benefits, time value of money, risk and uncertainty, and intangible factors. Show Answer Correct Answer: D) Initial cost, expected benefits, time value of money, risk and uncertainty, and intangible factors. 19. ..... the BCR, more worthwhile the intervention A) Lower. B) Higher. C) None of the two. D) None of above. Show Answer Correct Answer: B) Higher. 20. Emelia has been invited to a sleep over at Chloe's house for this Saturday. Emelia has tickets to see her favorite band in concert that same night. She decides to give the tickets to her sister and go to Chloe's house. What is the opportunity cost of her decision? A) Seeing her favorite band. B) Spending time at a friends house. Show Answer Correct Answer: A) Seeing her favorite band. 21. Scott also likes to get to the stadium early to watch batting practice. The closer he parks to the stadium the more batting practice he is able to watch. Find Scott's optimal parking garage A) Under Stadium. B) West River. C) Westin. D) East River. E) Fountain Square. Show Answer Correct Answer: D) East River. 22. ..... is calculated by subtracting the cost of an intervention from its benefits A) PNV. B) RCB. C) NPV. D) BCR. Show Answer Correct Answer: C) NPV. 23. A young chef is considering opening his own sushi bar. To do so, he would have to quit his current job, which pays $ 20 000 a year, and take over a store building that he owns and currently rents to his brother for $ 6000 a year. His expenses at the sushi bar would be $ 50 000, for food and $ 2000 for gas and electricity. What are his implicit costs? A) $ 52 000. B) $ 66 000. C) $ 78 000. D) $ 26 000. Show Answer Correct Answer: D) $ 26 000. 24. The following things are related to Cost-Benefit Analysis (CBA), except A) Strengths (S) and Weaknesses (W) Analysis. B) Sensitivity Analysis. C) Analysis of Distribution Effects and Impact on Poverty. D) Risk and Uncertainty Analysis. Show Answer Correct Answer: A) Strengths (S) and Weaknesses (W) Analysis. 25. Why is cost benefit analysis important? A) To ignore the potential benefits and costs of a decision or project. B) To focus only on the costs and not the benefits of a decision or project. C) To evaluate the potential benefits and costs of a decision or project. D) To make decisions without considering the potential benefits and costs. Show Answer Correct Answer: C) To evaluate the potential benefits and costs of a decision or project. 26. You want to buy a new video game and a new pair of sneakers. You only have enough money to buy one of them. If you buy the video game, what is your trade-off? A) The sneakers. B) The video game. C) The money for the video game. D) None of above. Show Answer Correct Answer: A) The sneakers. 27. Policy impact analysis that allows it to be calculated in a variety of different units is? A) Cost and Benefit Analysis (CBA). B) Cost Effectiveness Analysis (CEA). C) Impact Analysis (IA). D) Discount Rate. Show Answer Correct Answer: C) Impact Analysis (IA). 28. In the passage, the government does not have an UNLIMITED amount of money. What does the word UNLIMITED mean? A) A regular way of doing things. B) The place, person, or thing from which something comes. C) Having no limits, bounds, or restrictions. D) None of above. Show Answer Correct Answer: C) Having no limits, bounds, or restrictions. 29. The following are techniques for analyzing quantitative risk, except A) Problem Tree Analysis. B) Analytical Hierarchy Process. C) Sensitivity Analysis. D) Simulation and Monte-Carlo Techniques. Show Answer Correct Answer: B) Analytical Hierarchy Process. 30. The disadvantages of CBA analysis for government projects are, except A) Requires quantitative benefit calculations. B) There must be guaranteed efficient use of economic resources. C) Requires quantitative cost calculations. D) It does not have flexibility so that the benefits received by the community seem far from improving welfare and productivity. Show Answer Correct Answer: B) There must be guaranteed efficient use of economic resources. ← PreviousNext →Related QuizzesWelfare Economics QuizzesEconomics QuizzesCost Benefit Analysis Quiz 1Cost Benefit Analysis Quiz 3Cost Benefit Analysis Quiz 4 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books