Suppose your city is debating a change in policy from illegal use to legalizing recreational use of marijuana and cannabis products. Your local officials ask you to identify the appropriate aspects required to perform a cost- benefit analysis of this policy change. Using the principles of cost-benefit analysis, your local officials need help in identifying and understanding the benefits to consumers, the benefits to producers, total costs to consumers, total costs to producers, total costs from possible externalities, opportunity costs, incommensurable effects and intangible effects. For simplicity, dynamic time effects, which involve discount rates, are ignored. Following the principles of cost-benefit analysis, are the possible local crime concerns (a negative externality) accounted for in cost-benefit analyses? O No. The local crime effects do not factor into cost-benefit analysis. O Yes. The local crime effects should be estimated and accounted for as a cost or should be disclosed as an incommensurable. O Yes. The local crime effects should be estimated but are a zero-sum transfer and thus ultimately do not count towards benefits or costs. O Yes. The local crime effects should be estimated and accounted for in terms of the change in law enforcement costs.
Suppose your city is debating a change in policy from illegal use to legalizing recreational use of marijuana and cannabis products. Your local officials ask you to identify the appropriate aspects required to perform a cost- benefit analysis of this policy change. Using the principles of cost-benefit analysis, your local officials need help in identifying and understanding the benefits to consumers, the benefits to producers, total costs to consumers, total costs to producers, total costs from possible externalities, opportunity costs, incommensurable effects and intangible effects. For simplicity, dynamic time effects, which involve discount rates, are ignored. Following the principles of cost-benefit analysis, are the possible local crime concerns (a negative externality) accounted for in cost-benefit analyses? O No. The local crime effects do not factor into cost-benefit analysis. O Yes. The local crime effects should be estimated and accounted for as a cost or should be disclosed as an incommensurable. O Yes. The local crime effects should be estimated but are a zero-sum transfer and thus ultimately do not count towards benefits or costs. O Yes. The local crime effects should be estimated and accounted for in terms of the change in law enforcement costs.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:Suppose your city is debating a change in policy from illegal use to legalizing recreational use of marijuana and cannabis products. Your local officials ask you to identify the appropriate aspects required to perform a cost- benefit
analysis of this policy change. Using the principles of cost-benefit analysis, your local officials need help in identifying and understanding the benefits to consumers, the benefits to producers, total costs to consumers, total costs
to producers, total costs from possible externalities, opportunity costs, incommensurable effects and intangible effects. For simplicity, dynamic time effects, which involve discount rates, are ignored.
Following the principles of cost-benefit analysis, are the possible local crime concerns (a negative externality) accounted for in cost-benefit analyses?
O No. The local crime effects do not factor into cost-benefit analysis.
O Yes. The local crime effects should be estimated and accounted for as a cost or should be disclosed as an incommensurable.
O Yes. The local crime effects should be estimated but are a zero-sum transfer and thus ultimately do not count towards benefits or costs.
Yes. The local crime effects should be estimated and accounted for in terms of the change in law enforcement costs.
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