To Increase Safety at a Bad Intersection, the Mayor Must

Multiple Choice

To increase safety at a bad intersection, the mayor must decide whether to install a traffic light at a cost of $45,000. If the traffic light reduces the risk of fatality by 0.4 percent, and the value of a human life is estimated to be $10 million, the mayor should

A) install the light because the expected benefit of $400,000 is greater than the cost.
B) install the light because the expected benefit of $45,000 is greater than the cost.
C) not install the light because the expected benefit of $45,000 is only equal to the cost.
D) not install the light because the expected benefit of $40,000 is less than the cost.