To Increase Safety at a Bad Intersection,you Must Decide Whether

question 184

Multiple Choice

To increase safety at a bad intersection,you must decide whether to install a traffic light in your hometown at a cost of $10,000.If the traffic light reduces the risk of fatality by 0.5 percent,and the value of a human life is estimated to be $10 million,you should

• A)install the light because the expected benefit of $50,000 is greater than the cost.
• B)install the light because the expected benefit of $20,000 is greater than the cost.
• C)not install the light because the expected benefit of $10,000 is only equal to the cost.
• D)not install the light because the expected benefit of $5,000 is less than the cost.

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Definitions:

Residual Standard Deviation

A measure of the amount of variation in a set of observed values that is not explained by a statistical model, representing the standard deviation of the differences between predicted and observed values.

Regression Model

A mathematical representation used to estimate the relationship between a dependent variable and one or more independent variables.

Normally Distributed Residuals

Residuals (the differences between observed and predicted values) that are distributed according to a normal distribution, indicating a good fit for a linear model.

Normal Probability Plot

A graphical technique used to determine if a data set approximates a normal distribution, by plotting observed values against theoretically expected values in a normal distribution.