Supposed a proposed public policy could result in three possible outcomes:

1. Present value of net benefits of $4,000,000;

2. Present value of net benefits of $1,000,000;

3. Present value of net benefits of -$10,000,000 (yes, it is a loss).

If the probability of each outcome is, respectively, 0.85, 0.10, and 0.05, should the policy be pursued or not? Explain. (3 points)

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Darryn D'SouzaLv10

28 Sep 2019

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Case 6

Although the use of mobile communication devices by motor vehicle drivers is a dangerous practice, studies have shown that up to 80% of motor vehicle accidents in in Bubble Country are caused by this practice. Surveys have shown that even though drivers recognize that this is a dangerous practice, they cannot resist the temptation of using the devices. The surveys also found that individuals who regularly use their mobile devices while driving do not consider fines to be deterrent. The percentage of accidents attributable to driver distraction caused by the use of mobile communication devices has been increasing by 2% per year. A risk assessment has shown that the risk of having an accident for a driver using their mobile devices is 15%. Public opinion research suggests that the public is more concern about this issue than drinking and driving and would like the government to address it. Last year there were 20,000 motor vehicle accidents attributed to driver distraction in Bubble Country because of mobile communication device use.

In order to address the issue, the government of Bubble Country is considering a policy that will force car makers to install remote equipment in all cars to ensure that mobile communication devices cannot be used when driving. Such equipment is already available and it will cost car makers $12 to install such equipment in each car. The policy will also make it illegal to use a mobile communication device while driving and individuals found doing this will be given a fine of $800.

Part I:

Based on what youâve learnt from this course, and your understanding of project evaluation,

A) Describe or summarize what you understand the issue to be (5)

B) What do you think should be the objective and sub-objectives? (5)

C) Do you see a rationale for public sector involvement? Explain (5)

D) Discuss the potential benefits? Be comprehensive (10)

E) Discuss the potential cost? Be comprehensive (10)

F) Are there any external impacts? Explain (5)

G) Identify the stakeholders and describe who are the winners and losers? (10)

Part II:

With the information above and any additional information you can find and your own reasonable assumptions, undertake a rough cost benefit analysis

A) How will you quantify and monetize all your identified (10)

1) Costs

2 ) Benefits

3) What time frame will you use and why?

B) With a spreadsheet estimate (30)

1) The Present Value Cost â Economic

2) The present Value Benefits â Economic

3) Discuss any qualitative costs and benefits

C) With the following criteria, determine whether the project is economically feasible (10)

1) Net Present Value Criteria

2) Benefit Cost Ratio

goldmuskrat784

. Vouchers to Pay Private School
Tuition
Two conditions that justify government intervention in a market are the presence of external benefits and equity concerns. Both of these issues are present in the case of primary and secondary education in the United States. Think about what education without government education would look like. In the absence of government intervention, all primary and secondary education in the US would be private. Public school districts would not exist. Parents would need to pay private firms (schools) to educate their children.

External benefits

If all education were private, itâs likely that people would buy too little education, from societyâs point of view. External benefits are one reason. When a child is educated, he or she benefits and we expect his or her parents to take those benefits into account when they purchase education. But there are additional benefits to society which parents may ignore. As people become more educated, they are less likely to be unemployed or be criminals and are more likely to volunteer and vote. The presence of these external benefits is an example in support for the government getting involved in education.

Equity

Many families in the United States have low incomes. Among all children in first through twelfth grades in 2001, 46% were from families with incomes below $40,000. Since the cost of private education would be an important share of these familiesâ incomes, most Americans would be concerned about the fairness of relying on markets to decide how much education children receive. Current spending by these families on private education provides some support for this concern. Of all children in private school in 2001, only 25% were from families with incomes below $40,000. Therefore, equity concerns are another example in support for government getting involved in education.

Providing vs. producing education

Most economists think external benefits and equity concerns justify government intervention in education. But it is important to distinguish between government production of education and other forms of government intervention. At the level of elementary and secondary education, K- 12 education, government intervention today mostly means production of education by local school districts. To benefit, children must attend public schools. But this is not the only form intervention could take.
There are other markets where government intervention takes the form of subsidizing peopleâs access to productsâthink of financial aid to college students, for example. Many people in the US think that government should move from producing education to subsidizing access.

One form that subsidy could take is government providing vouchers to parents. Parents would use the voucher to help pay for their childâs education in a private school. After it receives the voucher, the school would turn it in and be paid by a local or state government.

Today there is a lively debate between people who think K-12 education should be delivered publicly and people who think quality and efficiency would be higher if government provided vouchers and the education was delivered by private schools. Some of these quality and efficiency arguments can be based on material we covered this week. Price competition between private schools will pressure each one to produce efficiently. Competition for students will lead private schools to offer programs of interest to parents and their children.

Answer the questions below and make use of the sources supplied. Be sure to cite you sources in your answers.

1. Explain whether a potential exit by students with vouchers will lead to the improvement of public schools. 2. Discuss whether the implementation of vouchers will lead the best students to leave public school, which could lead to a decline in education for the students left behind in the public schools. 3. Consider what might happen to the students who use vouchers to leave public schools in order to attend private schools. How might their academic performance change as a result of switching? 4. Finally, think about the impact of a voucher system on the students in an urban setting. Describe whether all families would have an equal opportunity to access education.

Your final product will be a paper that: ? Addresses each of the four questions above in total. ? Is APA formatted. ? The body is to be 2 pages minimum.

The requirements for your assignment are: 1. Answer each question fully 2. Define the overall subject of each question. 3. Cite at least three (3) resources from this weekâs materials.