Suppose that the Town of Bumbletree is considering hiring an additional police officer.The reduction in crime is estimated to be worth $10 for each of Bumbletree's 5,000 residents.What should the city do?
A) Hire the police officer because additional safety is priceless.
B) Hire the police officer if the cost of the new officer is less than $50,000.
C) Do not hire the police officer because the costs exceed the benefits.
D) Hire the police officer only if the benefit to the residents exceeds $50,000.

Question

Quizplus · Accepted Answer

The reduction in crime is estimated to be worth $10 for each of Bumbletree's 5,000 residents, which amounts to a total benefit of $50,000 ($10 x 5,000). Therefore, the cost of hiring the additional police officer should not exceed $50,000. Option B is the correct choice in this scenario, as it ensures that the cost-benefit ratio is favorable to the town.

Suppose That the Town of Bumbletree Is Considering Hiring an Additional