Suppose That the Average Person in a Group of 150,000

question 10

Multiple Choice

Suppose that the average person in a group of 150,000 people is willing to pay $10 to lower the probability of a random death among members of that group from 10 in 150,000 to 9 in 150,000. Then the total willingness to pay is $10 (150,000) = $1,500,000 is equal to

• A) the willingness to accept an additional death in the group, based on willingness to pay.
• B) the value of a statistical life, based on willingness to pay.
• C) the value that each individual places on their own life, based on willingness to pay.
• D) the average lifetime earned wage rate of members in the group.

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Definitions:

Profit

The financial benefit realized when income earned is greater than the expenses, taxes, and costs incurred in generating that income.

Donation

A present provided by individuals or organizations, usually for philanthropic reasons or to support a specific cause.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since its acquisition, reflecting its reduction in value over time.