ECONOMICS
COST BENEFIT ANALYSIS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Efficient use of factors of production
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Distribution of costs incurred and benefits obtained
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Economic stabilization, both micro and macro
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The benefits must be greater than the costs
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Detailed explanation-1: -In sum, the data show that the main problem with cost-benefit analysis is not error, but bias. This is bad news, because where errors tend to cancel out each other because of their randomness, biases are systematic and therefore compound leading to results of cost-benefit analysis that are highly misleading.
Detailed explanation-2: -A thorough cost-benefit analysis should identify the purpose and goals behind the project, gather business and project requirements, identify all of the resources to be used, determine the metrics to measure success, and consider other potential options.
Detailed explanation-3: -The main goal of cost-benefit analysis is to determine whether it is worth undertaking a project or task. This decision is made by gathering information on the costs and benefits of that project.
Detailed explanation-4: -Cost-effectiveness analysis is a way to examine both the costs and health outcomes of one or more interventions. It compares an intervention to another intervention (or the status quo) by estimating how much it costs to gain a unit of a health outcome, like a life year gained or a death prevented.