Multiple Choice
Which of the following statements is an example of a normative statement related to British colonial taxation?
91
views
0. Basic Principles of Economics
Positive and Normative Analysis
Multiple Choice
Which of the following is a potential benefit for a government leader using a cost-benefit analysis?
A
Making decisions based on objective evaluation of costs and benefits
B
Guaranteeing that every citizen agrees with the decision
C
Eliminating the need for any further economic analysis
D
Ensuring that all policies are morally justified
Verified step by step guidance1
Understand the purpose of cost-benefit analysis (CBA): it is a systematic approach used to evaluate the strengths and weaknesses of alternatives by comparing their costs and benefits in a quantifiable way.
Recognize that CBA helps decision-makers, such as government leaders, to make choices based on objective data rather than subjective opinions or political pressures.
Identify that CBA does not guarantee unanimous agreement among citizens because people have different preferences and values, so it cannot ensure everyone agrees with the decision.
Note that CBA does not eliminate the need for further economic or ethical analysis, as some factors may be difficult to quantify or require additional considerations beyond costs and benefits.
Conclude that the main benefit of using CBA is to support decisions through an objective evaluation of costs and benefits, helping leaders choose policies that maximize net benefits.
Related Videos
Related Practice
