Final answer:
Cost-benefit analysts often encounter the problem that those who would benefit from government provision of a public good tend to overstate the benefit they would receive from the public good, and those who would be harmed by government provision of a public good tend to understate the costs they would incur from the public good
(option C) .
Step-by-step explanation:
The correct answer to the question is: C. Overstate the benefit they would receive from the public good, and those who would be harmed by government provision of a public good tend to understate the costs they would incur from the public good.
Cost-benefit analysts often encounter the problem that those who would benefit from government provision of a public good tend to overstate the benefit they would receive from the public good, while those who would be harmed by government provision of a public good tend to understate the costs they would incur from the public good. This bias can make it challenging for analysts to accurately assess the true costs and benefits when evaluating public goods.
For example, individuals who would benefit from a new infrastructure project might exaggerate the positive impact it would have on their daily lives. Conversely, those who would bear the financial burden of funding the project may downplay their costs. These differing perspectives can lead to inaccurate cost-benefit analyses, making it crucial for analysts to carefully consider and adjust for these biases when evaluating public goods.