Suppose That the Cost of Installing an Overhead Pedestrian Walkway

question 69

Multiple Choice

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.

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Definitions:

Interstate Commerce Commission

The Interstate Commerce Commission (ICC) was a regulatory agency in the United States responsible for enforcing federal regulations governing railroad rates and operations. It has since been dissolved and replaced by other bodies.

Anti-Competitive Nature

Behaviors or actions by companies that unfairly restrict competition and control markets.

Administrative Agency

Any government body created by the legislative branch (e.g., Congress, a state legislature, or a city council) to carry out specific duties.

Anticompetitive Conduct

Actions by businesses that harm competition, including monopolization, illegal mergers, and unfair trade practices.