Deck 12: Analyses of Costs and Outcomes

Question 1

An advantage that accountants have over program evaluators is that

A) their crucial unit of analysis, a dollar, is widely disputed.
B) their crucial unit of analysis, a dollar, is widely accepted.
C) accountants are better educated.
D) business activity contains fewer ethical conflicts than human service work.

Answer 1

B

Question 2

Variable costs are to fixed costs as

A) electric bills are to monthly rent charges.
B) monthly rent charges are to electric bills.
C) costs incurred are to future costs.
D) liability insurance costs are to salaries.

Answer 2

A

Question 3

Sunk costs are those that

A) change with the size of the program.
B) occur as the program continues.
C) have already been expended.
D) can be recovered if the program is cancelled.

Answer 3

C

Question 4

Costs that have already been expended and cannot be recovered are called _______ costs.

A) opportunity costs
B) variable
C) excessive
D) sunk

Question 5

Indirect costs are

A) usually well understood by the staff.
B) those that are incurred in providing services for specific clients.
C) largely a fiction developed by accountants for bookkeeping conveniences.
D) those that cannot be associated with specific individual clients.

Question 6

Inaccurate estimates of program costs

A) seldom hurt anyone.
B) make it very hard to plan rationally.
C) are usually pessimistically high.
D) are never made by program planners working for the Federal Government.

Question 7

The outcomes of a cost-effective program

A) exceed those of other programs.
B) are less costly than those of other programs.
C) are achieved at a lower cost per unit of outcome than other programs seeking to affect the same variables.
D) are achieved at a greater cost per unit of outcome than other programs seeking to affect the same variables.

Question 8

When outcomes of a program can be expressed in dollars, then

A) a cost-benefit study can be done.
B) a cost-effectiveness study cannot be done.
C) one can be fairly sure that the program is effective.
D) the program has been trivialized.

Question 9

An evaluator doing a cost-benefit study may ignore certain benefits when

A) it has been shown that costs exceed benefits.
B) some of the costs have been ignored as well.
C) one is not interested in seeking to publish an article reporting the findings.
D) it has been shown that some benefits exceed program costs.

Question 10

Cost-effectiveness analyses are performed when one

A) can express the outcome in dollars.
B) cannot express outcomes in dollars, but can measure the outcomes of alternative programs that are designed to affect the same outcomes.
C) quasi-experimental designs are not possible.
D) cannot find parallel outcomes from two or more programs.

Question 11

Cost-effectiveness analyses _________ be used in decisions when outcomes of possible programs are expressed in different units, i.e. lives saved versus jobs created.

A) can
B) must
C) cannot
D) should not

Question 12

Cost-utility analyses refer to methods of relating program costs to

A) objective judgments of the value of certain outcomes.
B) the costs of negative side effects.
C) losses due to inadequate program implementation.
D) subjective judgments of the value of certain outcomes.

Question 13

In judging the usefulness of a cost-benefit evaluation, one must be wary of

A) values assumed in the choice of outcome variables.
B) the validity of the evaluations from which program benefits have been estimated.
C) the assumptions used in assigning dollar values to the outcomes.
D) all of the above

Question 14

The value of income one forgoes by attending college instead of getting a job right after high school is called

A) an indirect cost.
B) a sunk cost.
C) an opportunity cost.
D) a recurring cost.

Question 15

Since most human service programs are expected to yield benefits in the years after the program participants leave the program,

A) cost-benefit studies are conceptually impossible.
B) costs cannot be related to effectiveness.
C) the values of future benefits need to be estimated.
D) sunk costs take on considerable importance.

Question 16

If you have never had an automobile accident and, thus, never have collected from your auto insurance policy, you should

A) see the insurance as having been a waste of money.
B) recognize that the peace of mind from having insurance was a benefit.
C) drive carefully because you have been living a charmed life.
D) drive carefully because an accident is overdue.

Question 17

Evaluators using cost-effectiveness and cost-benefit analyses have been criticized for

A) placing a value on priceless human lives.
B) valuing all people equally.
C) failing to conduct internally valid research.
D) avoiding more standard research designs.

Question 18

An evaluator might place a dollar value on a human life; however,

A) no one takes it seriously.
B) this shows disrespect for the people studied.
C) this is simply an attempt to show how much money society, in fact, devotes to avoiding the premature death of a person, such as an employee.
D) such information never has any use in making selections among programs.

Question 19

A problem with using cost-benefit analysis is that

A) while the value of benefits is easy to calculate, the costs of the program are difficult to estimate.
B) many benefits, especially in human service settings, are hard to place a dollar value on.
C) the dollar unit is not that important in human service settings.
D) it does not add much information to program evaluation reports.

Question 20

Suppose that an administrator had to select neither or either program A or B and that the cost-benefit ratios were Program A = 1:2.3 and Program B = 1:1.7. What should the administrator do?

A) Select Program
B) Select Program
C) Select neither A nor B since 1 is less than 2.3 and 1.7.

Question 21

If the cost of a program is $1,000 and its benefits are estimated to be $900, what is the cost- benefit ratio?

A) 1000 to 900
B) 900 to 1000
C) 1 to 0.9
D) 0.9 to 1

Question 22

Estimated costs for planned medical services for children and the elderly

A) should be compared to earnings potential.
B) provide a basis for cost-benefit analyses.
C) can be used in cost-utility analyses.
D) should not be publicized or used in planning.

Question 23

When considering the costs and benefits of programs, different stakeholder groups are especially likely to draw different conclusions from the analyses if

A) the people who collect benefits are different from the ones who bear the costs.
B) the people who benefit are also the ones who pay the costs.
C) opportunity costs are placed in units of dollars.
D) sunk costs are correctly considered.

Question 24

Support the position that cost analyses must be part of comprehensive program evaluations.

Question 25

University faculty members often dispute the need to cover indirect costs for their research activities. They sometimes comment to the effect that "The buildings are here already, my lab will be heated because the classrooms will be heated anyway; therefore, indirect costs of my research is just a way of raising money." Marshall the reasons why indirect costs must be considered in assessing the costs of research.

Question 26

Why is a $100 benefit available in five years from now more valuable than a $100 benefit available ten years from now? (Assume that both are absolutely assured.)

Question 27

The core issue of cost-benefit analyses (or cost-effectiveness analyses) is the unit of analyses used-dollars of benefit per dollar of cost (or units of outcome per dollar of cost). Illustrate the importance of the issue of units of analysis in examining program impacts. How might one err in examining benefits or measuring effectiveness? (Hint: think about choosing outcome variables to measure.)

Question 28

Some critics of cost-benefit analyses point to the monetary value set on saving a human life, say, $8 million dollars, and ask: "Does that mean that if I pay $8 million dollars to someone (or to his heirs), I can kill them?" What misunderstanding of cost-benefit analyses does this comment reflect?