A. Briefly describe major similarities and differences between public-sector benefit-cost analy- sis and the private-sector capital budgeting process.
B. What major questions must be answered before meaningful benefit-cost analysis is possible?
C. Although the maximization of society’s wealth is the primary objective of benefit-cost analysis, it is important to recognize that constraints often limit government’s ability to achieve certain objectives. Enumerate some of the common economic, political, and social constraints faced in public-sector benefit-cost analysis.
D. In light of these constraints, discuss some of the pluses and minuses associated with the use of benefit-cost analysis as the foundation for a general approach to the allocation of government-entrusted resources.