To increase safety at a bad intersection, the mayor must decide whether to install a traffic light at a cost of $45,000 . If the traffic light reduces the risk of fatality by 0.4 percent, and the value of a human life is estimated to be $10 million, the mayor should
a. install the light because the expected benefit of $400,000 is greater than the cost.
b. install the light because the expected benefit of $45,000 is greater than the cost.
c. not install the light because the expected benefit of $45,000 is only equal to the cost.
d. not install the light because the expected benefit of $40,000 is less than the cost.
d
You might also like to view...
An inward shift of the production possibilities curve
A. represents an economic decline. B. means that the previous levels of production are now unobtainable except under unusual circumstances such as war. C. means that the economy can produce more of both goods. D. represents an economic decline AND means that the previous levels of production are now unobtainable except under unusual circumstances such as war.
Higher saving rates mean higher future growth rates because
A) the banks have more money to distribute to their shareholders. B) saving contributes to more investment, which yields a larger capital stock. C) the interest earned from savings gives you more wealth. D) saving contributes to less investment, which yields a larger capital stock.
If a nation's nominal GDP is $40 billion, its money supply is $8 billion, and its price level is 1.25, then the velocity of money is
A) 2.0. B) 0.2. C) 6.25. D) 5.0.
The existence of income transfer programs indicates that the market mechanism has failed.
Answer the following statement true (T) or false (F)