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:

Product Materials

The raw materials and substances used in the manufacture of a product.

Business Lunch

A meal event typically intended for discussing business matters, networking, or fostering professional relationships, often taking place during lunch hours.

Net Profit

Money remaining after costs of marketing and operating the business are paid.

Cost Of Goods Sold

Cost of Goods Sold (COGS) represents the direct costs attributable to the production of the goods sold by a company, including materials and labor costs.