4. Cost-benefit analysis A local college is deciding whether to conduct a campus beautification initiative that would involve various projects, such as planting trees and remodeling buildings, to make the campus more aesthetically pleasing. and Thus, the visual appearance would For the students of the college, the visual appearance of the campus is be classified as a public good. Suppose the college administrators estimate that the beautification initiative will cost $2,700. To decide whether the initiative should be undertaken, administrators conduct a survey of the college's 290 students, asking each of them their willingness to pay for the beautification project. The average willingness to pay, as revealed by the survey, is $15. Because the estimated benefit is than the The benefit of the beautification initiative, as suggested by the survey, is $ cost, the college administrators ✓ undertake the beautification initiative. The calculation of the benefit of the beautification initiative relied on the ability of the administrators to capture the true willingness to pay of each student accurately. Which of the following scenarios would cause the survey used by the college administrators to yield misleading data on willingness to pay? Check all that apply. O An equal number of male and female students were surveyed. Students believe they will eventually be charged their willingness to pay. 3°F ostly cloudy
4. Cost-benefit analysis A local college is deciding whether to conduct a campus beautification initiative that would involve various projects, such as planting trees and remodeling buildings, to make the campus more aesthetically pleasing. and Thus, the visual appearance would For the students of the college, the visual appearance of the campus is be classified as a public good. Suppose the college administrators estimate that the beautification initiative will cost $2,700. To decide whether the initiative should be undertaken, administrators conduct a survey of the college's 290 students, asking each of them their willingness to pay for the beautification project. The average willingness to pay, as revealed by the survey, is $15. Because the estimated benefit is than the The benefit of the beautification initiative, as suggested by the survey, is $ cost, the college administrators ✓ undertake the beautification initiative. The calculation of the benefit of the beautification initiative relied on the ability of the administrators to capture the true willingness to pay of each student accurately. Which of the following scenarios would cause the survey used by the college administrators to yield misleading data on willingness to pay? Check all that apply. O An equal number of male and female students were surveyed. Students believe they will eventually be charged their willingness to pay. 3°F ostly cloudy
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![### Cost-Benefit Analysis
**Scenario:**
A local college is deciding whether to conduct a campus beautification initiative involving various projects, such as planting trees and remodeling buildings, to enhance the campus's aesthetic appeal.
**Problem Statement:**
For the students of the college, the visual appearance of the campus is \_\_\_\_\_\_\_\_\_\_\_ and \_\_\_\_\_\_\_\_\_\_\_.
Thus, the visual appearance would be classified as a public good.
**Financial Estimation:**
Suppose the college administrators estimate that the beautification initiative will cost $2,700. To determine whether this initiative should be undertaken, administrators conduct a survey of the college's 290 students, asking each of them their willingness to pay for the beautification project. The average willingness to pay, as revealed by the survey, is $15.
**Benefit Calculation:**
The benefit of the beautification initiative, as suggested by the survey, is $ \_\_\_\_\_\_\_\_\_ . Because the estimated benefit is \_\_\_\_\_\_\_\_\_ than the cost, the college administrators \_\_\_\_\_\_\_\_\_ undertake the beautification initiative.
**Accuracy Consideration:**
The calculation of the benefit of the beautification initiative relied on the ability of the administrators to capture the true willingness to pay of each student accurately.
**Survey Analysis:**
Which of the following scenarios would cause the survey used by the college administrators to yield misleading data on willingness to pay? Check all that apply.
- \[\ \] An equal number of male and female students were surveyed.
- \[\ \] Students believe they will eventually be charged their willingness to pay.
This simple exercise helps in understanding the mechanism of cost-benefit analysis and the factors that can influence the accuracy of such studies.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F915e475f-48fb-4231-b345-572f47a2663c%2F937fec16-d9d2-4d86-88fb-4319d9606e04%2Ftkzac89_processed.jpeg&w=3840&q=75)
Transcribed Image Text:### Cost-Benefit Analysis
**Scenario:**
A local college is deciding whether to conduct a campus beautification initiative involving various projects, such as planting trees and remodeling buildings, to enhance the campus's aesthetic appeal.
**Problem Statement:**
For the students of the college, the visual appearance of the campus is \_\_\_\_\_\_\_\_\_\_\_ and \_\_\_\_\_\_\_\_\_\_\_.
Thus, the visual appearance would be classified as a public good.
**Financial Estimation:**
Suppose the college administrators estimate that the beautification initiative will cost $2,700. To determine whether this initiative should be undertaken, administrators conduct a survey of the college's 290 students, asking each of them their willingness to pay for the beautification project. The average willingness to pay, as revealed by the survey, is $15.
**Benefit Calculation:**
The benefit of the beautification initiative, as suggested by the survey, is $ \_\_\_\_\_\_\_\_\_ . Because the estimated benefit is \_\_\_\_\_\_\_\_\_ than the cost, the college administrators \_\_\_\_\_\_\_\_\_ undertake the beautification initiative.
**Accuracy Consideration:**
The calculation of the benefit of the beautification initiative relied on the ability of the administrators to capture the true willingness to pay of each student accurately.
**Survey Analysis:**
Which of the following scenarios would cause the survey used by the college administrators to yield misleading data on willingness to pay? Check all that apply.
- \[\ \] An equal number of male and female students were surveyed.
- \[\ \] Students believe they will eventually be charged their willingness to pay.
This simple exercise helps in understanding the mechanism of cost-benefit analysis and the factors that can influence the accuracy of such studies.
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