A U.S. emergency relief agency is considering sending a team of experts to another country to treat a severely contagious disease outbreak. Each team member is paid $10,000 for this one-week-long job. The agency estimates effectiveness as follows:
? $\begin{array}{|l|l|}
\hline \text { Number of Team Members }& \text { Number of Deaths }\
\hline 0 & 1,000 \
\hline 5 & 400 \
\hline 10 & 150 \
\hline 15 & 30 \
\hline 20 & 30 \
\hline
\end{array}$
-Which decision rule is relevant for the decision making in this project?
A) Comparing marginal costs to average costs.
B) Comparing marginal benefits to average benefits.
C) Comparing marginal costs and marginal benefits.
D) Comparing average costs and average benefits.
E) Comparing total costs and total benefits.

Question

A U.S. emergency relief agency is considering sending a team of experts to another country to treat a severely contagious disease outbreak. Each team member is paid $10,000 for this one-week-long job. The agency estimates effectiveness as follows:
? $\begin{array}{|l|l|}
\hline   \text { Number of Team Members }&  \text {  Number of Deaths }\
\hline 0 & 1,000 \
\hline 5 & 400 \
\hline 10 & 150 \
\hline 15 & 30 \
\hline 20 & 30 \
\hline
\end{array}$
-Which decision rule is relevant for the decision making in this project?
A) Comparing marginal costs to average costs.
B) Comparing marginal benefits to average benefits.
C) Comparing marginal costs and marginal benefits.
D) Comparing average costs and average benefits.
E) Comparing total costs and total benefits.

Quizplus · Accepted Answer

The decision rule of comparing marginal costs and marginal benefits is relevant here because the agency needs to assess the additional cost of sending one more team member against the additional benefit (reduction in the number of deaths) that results from sending that extra member. This helps in determining the optimal number of team members to send for the task.

A US Emergency Relief Agency Is Considering Sending a Team of of Experts