Question 1
Provincial laws that mandate a minimum drinking age for alcohol are an example of government intervention through
◦ merit-goods control.
◦ communism.
◦ redistribution and reorganization.
◦ regulation.
◦ public provision and price control.
Question 2
Which of the following statements concerning cost-benefit analysis is true?
◦ Though it is often difficult to estimate costs and benefits with precision, cost-benefit analysis can be useful in determining whether to implement a given government policy.
◦ Large potential benefits, regardless of their time horizon, always justify government intervention.
◦ Large potential costs, regardless of their time horizon, always preclude government intervention.
◦ Cost-benefit analysis can be used effectively by private firms but should not be used in the public sector.
◦ Though benefits from a government policy can be accurately measured, costs are usually impossible to quantify.
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