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.

Explain the relationship between marginal cost, marginal revenue, average total cost, and the firm's supply decision.

Describe the demand curve faced by perfectly competitive firms and its implications.

Recognize the impacts of market entry and exit on the supply, demand, and pricing in the long run.

Discuss the notion of economic versus accounting profits in the context of perfect competition.

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Definitions:

Segments

Different parts or sections of a market, divided based on characteristics like demographics, needs, or preferences.

Profit-maximizing

The process or strategy of adjusting production and sales in order to achieve the highest possible profit from operations, considering both revenues and costs.

Charges

Fees imposed for services rendered or penalties for not meeting certain conditions.

Profit-maximizing

A strategy aiming to achieve the highest profit possible by adjusting output levels, pricing, or other operational variables.