Suppose that the Town of Mapledale is considering hiring an additional firefighter. The expected benefit is estimated to be worth $5 for each of Mapledale's 15,000 residents. What should the city do?
A)Hire the firefighter because additional fire protection is priceless.
B)Hire the firefighter if the cost of the new firefighter is less than $75,000.
C)Do not hire the firefighter because the costs exceed the benefits.
D)Hire the firefighter only if the benefit to the residents exceeds $75,000.

Question

Quizplus · Accepted Answer

The expected benefit per resident of hiring an additional firefighter is $5, so the total benefit for all residents would be $5 x 15,000 = $75,000. Therefore, the city should only hire the firefighter if the cost is less than $75,000 so that the benefits outweigh the costs. Option A is incorrect as the benefit has a quantifiable value. Option C is incorrect as it is a blanket statement that makes no reference to the specific cost-benefit analysis of hiring the firefighter. Option D is also incorrect as the benefit threshold for hiring the firefighter is $75,000, not greater than $75,000.

Suppose That the Town of Mapledale Is Considering Hiring an Additional