5. What is the correct criterion in evaluating government programs?
A. The size of government: A larger government provides more goods.
B. The size of government: A smaller government has lower taxes.
C. By comparing the marginal benefit to the marginal cost of the government program. If the marginal benefit exceeds the marginal cost this is an efficient program.
D. By comparing the marginal benefit to the marginal cost of the government program. If the marginal cost exceeds the marginal benefit this is an efficient program.

Question

5.    What is the correct criterion in evaluating government programs?
A.    The size of government: A larger government provides more goods.
B.    The size of government: A smaller government has lower taxes.
C.    By comparing the marginal benefit to the marginal cost of the government program. If the marginal benefit exceeds the marginal cost this is an efficient program. 
D.    By comparing the marginal benefit to the marginal cost of the government program. If the marginal cost exceeds the marginal benefit this is an efficient program.

BlackTom AI · Accepted Answer

The question asks: What is the correct criterion in evaluating government programs?
Option A: 'The size of government: A larger government provides more goods.' This focuses on the size of government rather than on evaluation of a specific program’s value. Merely being larger or smaller does not determine efficiency; it ignores whether the benefits justify the costs.
Option B: 'The size of government: A smaller government has lower taxes.' While taxes relate to government size, this choice ties efficiency to tax levels rather than to the specific marginal benefits and costs of the program in question. It conflates fiscal burden with program value and misses the core efficiency test.
Option C: 'By comparing the marginal benefit to the marginal cost of the government program. If the marginal benefit exceeds the marginal cost this is an efficient program.' Here, the focus is directly on marginal analysis: when MB > MC, resources are allocated to maximize net benefits, implying efficiency for that program.
Option D: 'By comparing the marginal benefit to the marginal cost of the government program. If the marginal cost exceeds the marginal benefit this is an efficient program.' This reverses the correct logic. If MC > MB, the net benefit is negative, indicating inefficiency, not efficiency.
In sum, A and B mistake the basis for evaluating a program by general size or tax effects rather than the program’s own marginal cost-benefit balance, while D incorrectly defines efficiency by the opposite inequality. C correctly centers the standard marginal cost–benefit criterion used in evaluating public programs.

Similar Questions

What are the criteria is typically not used to compare costs and benefits in cost-benefit analysis? (multiple answers possible)

What are the criteria is typically not used to compare costs and benefits in cost-benefit analysis? (multiple answers possible)

Cost-benefit analysis considers WTP as a factor in decision-making.

Cost-benefit analysis considers WTP as a factor in decision-making.

Governments use Cost-Benefit Analysis to ensure resources are used efficiently and public policies provide the greatest benefit.

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler