The Occupational Safety and Health Administration (OSHA) has determined that 100 workers are exposed to a hazardous chemical used in the production of diet soft drinks.The cost of imposing a regulation that would ban this chemical is $10 million.OSHA has calculated that each person saved by this regulation has a value equal to $10 million.If benefits are exactly equal to costs, what probability is OSHA using to assess the likelihood of a fatality from exposure to this chemical?
A)0.001
B)0.01
C)0.1
D)1.0

Question

Quizplus · Accepted Answer

Since the benefits are exactly equal to the costs, OSHA is assuming a 50/50 probability of a fatality from exposure to the hazardous chemical. To calculate this, we divide the cost of the regulation ($10 million) by the value of each person saved ($10 million), which gives us 1. Therefore, the probability of a fatality is 1/100, or 0.01. Therefore, the correct answer is B, 0.01.

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