public finance: cost benefit analysis
Name
Professor
Class
Date
Public Finance: Cost Benefit Analysis
Question Two
A government’s opportunity cost is the measure of a resource social margin costs incurred when they forgo an alternative. The opportunity cost of a government varies depending on the nature of the market. Government purchases occur when the government buys goods and services on behalf of the public. The opportunity costs of the government relate to its purchases of the public good and service. General government spending incurs opportunity costs that are equal to the input costs of producing the resource or service.
In a perfect competitive market, there are many firms. In this case, the marginal resource costs will equal the price of the good in the market. In the event the government purchases from a monopolistic market, there will be a shift in the demand curve to the right. The surplus on monopolistic produces increases because they will sell their goods at a high price. These high rates imply that there the social marginal cost will be less than the prices in a monopolistic market. In cost benefit analysis, the opportunity cost will be equal to the marginal costs. The increase in prices is a transfer to the monopolistic firm and not a cost nor a benefit.
Question Three
Councilor Squeaky is correct because he suggest that there are no efficiency costs while raising the revenue. This agreement is because the real social cost of the project relies on the marginal cost of production of the inputs. If the input prices are high, then the costs of the project will also be high. The added costs that the suppliers use in pricing are a transfer and not a cost or a benefit. Therefore, it is important to consider the prices that the suppliers set for the data of the project. This consideration implies that the costs of inputs are relevant in the assessment of the viability of the project. The councilor Miles’ argument will only be right if there are efficiency costs associated with tax
Professor
Class
Date
Public Finance: Cost Benefit Analysis
Question Two
A government’s opportunity cost is the measure of a resource social margin costs incurred when they forgo an alternative. The opportunity cost of a government varies depending on the nature of the market. Government purchases occur when the government buys goods and services on behalf of the public. The opportunity costs of the government relate to its purchases of the public good and service. General government spending incurs opportunity costs that are equal to the input costs of producing the resource or service.
In a perfect competitive market, there are many firms. In this case, the marginal resource costs will equal the price of the good in the market. In the event the government purchases from a monopolistic market, there will be a shift in the demand curve to the right. The surplus on monopolistic produces increases because they will sell their goods at a high price. These high rates imply that there the social marginal cost will be less than the prices in a monopolistic market. In cost benefit analysis, the opportunity cost will be equal to the marginal costs. The increase in prices is a transfer to the monopolistic firm and not a cost nor a benefit.
Question Three
Councilor Squeaky is correct because he suggest that there are no efficiency costs while raising the revenue. This agreement is because the real social cost of the project relies on the marginal cost of production of the inputs. If the input prices are high, then the costs of the project will also be high. The added costs that the suppliers use in pricing are a transfer and not a cost or a benefit. Therefore, it is important to consider the prices that the suppliers set for the data of the project. This consideration implies that the costs of inputs are relevant in the assessment of the viability of the project. The councilor Miles’ argument will only be right if there are efficiency costs associated with tax