In evaluating public programs, benefit-cost analysis:
A) takes into account only the benefits that society gains from public programs.
B) states that a program should be undertaken only if it generates revenue.
C) states that a program should be undertaken only if total benefits exceed total costs.
D) takes into account only the direct costs of the program.
E) states that a program should be undertaken only if there are no indirect costs.

Question

Quizplus · Accepted Answer

Benefit-cost analysis states that a program should be undertaken only if the total benefits exceed the total costs. This means that both direct and indirect costs need to be taken into account, as well as all the benefits that society gains from the program. Generating revenue is not the main criteria for undertaking a public program, as there may be other social and environmental benefits that cannot be measured in monetary terms.

In Evaluating Public Programs, Benefit-Cost Analysis