Suppose the cost to erect a tornado siren in a small town is $20,000.In addition,suppose the value of a human life is $10 million.By what percentage would the siren need to reduce the risk of a fatality for the benefits of the siren to exceed the costs of the siren?

Question

Quizplus · Accepted Answer

The siren costs $20,000 and the value of a human life is $10 million. To justify the cost, the siren must reduce the risk of a fatality by at least $20,000 / $10,000,000 = 0.002, or 0.2 percentage points.

Suppose the Cost to Erect a Tornado Siren in a Small