What do you think are the main strengths in having a cost-benefit analysis done for a project or policy or programme?

Question 1
What do you think are the main strengths in having a cost-benefit analysis done for a project or policy or programme? What are some of the limitations of cost-benefit analysis? For each of the limitations you have provided, can you suggest how we can minimise or resolve these limitations? Finally, what are your own views of cost-benefit analysis, considering all of the above responses and the literature in general? (25 marks)
Question 2
In cost-benefit analysis, the main focus is on efficiency, specifically the Kaldor-Hicks notion of economic efficiency. Do you think that cost-benefit analysis falls short when equity issues are not given due priority? If so, why do you think that way, and if not, why? And, if cost-benefit analysis were to consider equity issues, how might that be done (in your answer, explain with some numerical examples).
Question 3
[Part 1]
You are hired by the government to conduct a cost-benefit analysis for a proposed workforce skills enhancement programme. The programme requires the government to build a new training facility. You need to find the net social cost (or benefit) of materials used in the construction. The marginal cost (MC) of supplying a material used in construction is MC=0.01Q, where Q is quantity. Due to various market imperfections, the good is sold according to the supply curve P=0.02Q, where P is price. The private inverse demand function for the good is P=6.0-0.04Q. The project will need 50 added units of Q at every P. Find
a. The expression of the new inverse demand function (2 marks)
b. The pre-project equilibrium (2 marks)
c. The post-project equilibrium (2 marks)
d. The budget cost of materials to the government (2 marks)
e. The consumer surplus loss (2 marks)
f. The producer surplus gain (4 marks)
g. The net social cost (or benefit) of materials (2marks)
[Part 2] The government found an existing facility that can be reused for the programme (i.e. no construction needed). The training programme will cost the government $100 per participant in year zero and nothing thereafter. It generates benefits of β per participant per year beginning in year one. These benefits decline by 0.2β each year, so that in the sixth year they are zero. All wages and prices rise by 5 percent each year, and the nominal discount rate is 7 percent
h. Find the level of β required to make the program a success. (4 marks)
i. A subject matter expert has determined that the programme requires the participant to commit full-time to the training (i.e. participants will not be able to hold a full-time job(. Would it make a difference to your analysis if the participants are employed or not? Briefly explain your answer to the policymaker who has commissioned you to conduct the analysis (1/2 page or less, point form is ok). (5 marks)

a. What are the annual visitation rate for each zone? (2 marks)
b. What are the mean travel cost for each zone? (2 marks)
c. Construct a diagram showing the estimated demand relationship (travel cost per visit vs annual visit rate) for the attraction. In the diagram, show the difference between the following scenarios:
I. if no consumers are willing to pay more than $90 to visit the park,
II. if consumers are willing to pay more than $90 to visit the park. (6 marks)
d. Consider the people living only in Zone 5. What is the consumer surplus for visits to the attraction? Assume that no consumers are willing to pay more than $90 to visit the park. (1 marks)
e. Find the total consumer surplus for visits to the attraction, assuming that consumers are willing to pay more than $90 to visit the park. (5 marks)
f. Explain what would happen to the demand relationship in (c)II if an entry fee was charged for the attraction in general and using a numerical example of a zone. Assume that consumers are willing to pay more than $90 to visit the park. (4 marks)
g. In 2014, the Sisters’ Islands Marine Park was designated a Marine Protected Area (MPA) by the Singapore Government. Do you think that the Travel Cost Method can be used when deciding which marine area to designate as an MPA in the legal borders of Singapore? Briefly explain your answer to a policymaker who is trying to make this decision (1/2 page or less, point form is ok). (5 marks