Question

What is difficult about using cost-benefit analysis to estimate the level of a public good that will maximize social welfare?

		The government cannot use cost-benefit analysis to estimate this.
		It is difficult to estimate the marginal costs of supplying a public good.
		It is difficult to estimate the marginal social benefits of supplying a public good.
		The costs of using it may make the provision of the public good prohibitive.

Answer 1

What is difficult about using cost-benefit analysis to estimate the level of a public good that will maximize social welfare

Option C :- It is difficult to estimate the marginal social benefits of supplying a public good.

• The cost-benefit analysis is the analysis of good and bad in the alternative which gives the best benefit keeping the savings preserved.
• It is very tough for the government to use the cost-benefit analysis for estimating the level of the public good that will maximize social welfare because the analysis of marginal benefit is much harder in the case of supplying a public good.

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