Can you please show how to get the answer to the question, thanks! To increase s
ID: 1129969 • Letter: C
Question
Can you please show how to get the answer to the question, thanks!
To increase safety at a bad intersection, you must decide whether to install a traffic light in your home town at a cost of $10 000. If the traffic light reduces the risk of fatality by 0.5 percent and the value of a human life is about $10 million, what should you do?
a.
You should install the light because the expected benefit of $50 000 is greater than the cost.
b.
You should install the light because the expected benefit of $20 000 is greater than the cost.
c.
You should not install the light because the expected benefit of $10000 is only equal to the cost.
d.
You should not install the light because the expected benefit of $5000 is less than the cost.
a.
You should install the light because the expected benefit of $50 000 is greater than the cost.
b.
You should install the light because the expected benefit of $20 000 is greater than the cost.
c.
You should not install the light because the expected benefit of $10000 is only equal to the cost.
d.
You should not install the light because the expected benefit of $5000 is less than the cost.
Explanation / Answer
Solution: You should install the light because the expected benefit of $50 000 is greater than the cost
Explanation:
Cost = $10,000; Benefit = 0.5%*10,000,000 =50,000
Thus installing a better lighting system in the city park would reduce the risk of human life; and city should install the new lighting system because cost does not exceed benefits