Cost-benefit analysts often encounter the problem that those who would benefit from government provision of a public good tend to
A)overstate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to overstate the costs they would incur from the public good.
B)overstate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to understate the costs they would incur from the public good.
C)understate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to overstate the costs they would incur from the public good.
D)understate the benefit they would receive from the public good and those who would be harmed by government provision of a public good tend to understate the costs they would incur from the public good.

Question

Quizplus · Accepted Answer

Those who would benefit from a public good often overstate their benefits to ensure the good is provided, while those who would be harmed (e.g., through increased taxes) tend to overstate their costs to prevent its provision. This behavior can complicate accurate cost-benefit analysis.

Cost-Benefit Analysts Often Encounter the Problem That Those Who Would