Highway engineers have proposed improving a dangerous stretch of highway at a cost of $3 million.They expect that it will reduce the risk of someone dying in an accident from 22.1 percent to 7.1 percent over the life of the highway.What is the value of a human life whereby the project would be worth doing
A)at least $450,000
B)at least $9.05 million
C)at least $10 million
D)at least $12.2 million

Question

Quizplus · Accepted Answer

The value of a human life is the amount of money that people are willing to pay to reduce the risk of death. In this case, the highway engineers are proposing a project that will reduce the risk of death from 22.1 percent to 7.1 percent. The cost of the project is $3 million. So, the value of a human life is at least $3 million / (22.1% - 7.1%) = $450,000.

Highway Engineers Have Proposed Improving a Dangerous Stretch of Highway