The Occupational Safety and Health Administration (OSHA) has determined that the probability of a worker dying from exposure to a hazardous chemical used in the production of diet soft drinks is 0.0005.The cost of imposing a regulation that would ban this chemical is $18 million.If each person saved has a value equal to $10 million, how many people must the policy affect in order for benefits to exceed costs?
A)3600
B)1800
C)600
D)100

Question

Quizplus · Accepted Answer

The benefits of the regulation are equal to the number of people saved multiplied by the value of each person saved. The costs of the regulation are equal to $18 million. In order for the benefits to exceed the costs, the number of people saved must be greater than 18 million divided by the value of each person saved. In this case, the value of each person saved is $10 million, so the number of people saved must be greater than 18 million divided by 10 million, which is 1800.

The Occupational Safety and Health Administration (OSHA) Has Determined That