Studies have determined that 100 workers are exposed to a hazardous chemical used in the production of diet soft drinks.The cost of imposing a regulation that would ban this chemical is $5 million.Each person saved by this regulation has a value equal to $5 million.If benefits are exactly equal to costs,what probability is used to assess the likelihood of a fatality from exposure to this chemical
A)0.001
B)0.01
C)0.1
D)1.0

Question

Quizplus · Accepted Answer

If the benefits are equal to the costs, then the expected number of fatalities prevented must equal the cost divided by the value per life saved. Here, $5 million / $5 million per life = 1 life. With 100 workers, the probability of a fatality is 1/100 = 0.01.

Studies Have Determined That 100 Workers Are Exposed to a Hazardous