Suppose that the cost of installing an overhead pedestrian walkway in a college town is $150,000. The walkway is expected to reduce the risk of fatality by 1.5 percent, and the cost of a human life is estimated at $10 million. The town should
A)install the walkway because the estimated benefit is twice the cost.
B)be indifferent between installing and not installing the walkway because the estimated benefit equals the cost.
C)not install the walkway, since the cost is twice the estimated benefit.
D)install the walkway, since the cost of even a single life is too great not to take action.

Question

Quizplus · Accepted Answer

The Answer of Suppose that the cost of installing an overhead pedestrian walkway in a college town is $150,000. The walkway is expected to reduce the risk of fatality by 1.5 percent, and the cost of a human life is estimated at $10 million. The town should
A)install the walkway because the estimated benefit is twice the cost.
B)be indifferent between installing and not installing the walkway because the estimated benefit equals the cost.
C)not install the walkway, since the cost is twice the estimated benefit.
D)install the walkway, since the cost of even a single life is too great not to take action.

Suppose That the Cost of Installing an Overhead Pedestrian Walkway