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CBA analysts typically evaluate only one project at a time Because government expenditures are fixed each year in asking people whether they favor expandi

TRUE/FALSE/DEPENDS and justify your answer! CBA analysts typically evaluate only one project at a time. Because government expenditures are fixed each year, in asking people whether they favor expanding government programs, we should refrain from mentioning government costs. Most people would be willing to pay less to obtain something than they would require to give up the same thing willingly. The key difference between CBA and Cost-effectiveness analysis (CEA) is that CEA does not account for benefits. In the Financial Post (part of Canada's National Post), Peter Shawn Taylor argues that the Cost/Benefit Analysis is the best way to evaluate a project. He is correct. A CBA “With and Without Project” is essentially the same as the “Do Nothing” Alternative. Because of a recent wave of jewelry store robberies, a city increases police surveillance of jewelry stores. The increased surveillance costs the city an extra $500,000 per year, but as a result, the amount of jewelry stolen falls. Specifically, without the increase in surveillance, jewelry with a retail value of $1 million would have been stolen. This stolen jewelry would have been fenced by the jewelry thieves for $600,000. The net social benefit resulting from the police surveillance program is $500,000.

Apr 30 2020 View more View Less

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