11. Applied Economics and Data

Cost Benefit — Quiz

Test your understanding of cost benefit with 5 practice questions.

Practice Questions

Question 1

Which of the following is considered a direct cost in a cost-benefit analysis for building a new school?

Question 2

When evaluating a public project, what is the primary reason for converting future costs and benefits to their present value?

Question 3

A public library project has an initial cost of $1,000,000$. It is expected to generate benefits of $1,200,000$ in one year. If the discount rate is $5\%$ per year, what is the present value of the benefits?

Question 4

Which of the following scenarios would most likely lead to a public project being considered unviable based on a cost-benefit analysis?

Question 5

What is the primary purpose of a discount rate in cost-benefit analysis?