The three firms shown below can choose among three workplace safety alternatives: continue with the status quo,provide safety training or purchase new safety equipment.The injury rates for the firms under the three alternatives as well as the costs of the alternatives are shown in the table.The cost of treating an injury is $200. $\begin{array}{cccc}
& \text { Status Quo } & \text { Safety Training } & \text { New Safety Equipment } \
\underline { \text { Firm } } & \underline { 7 \text { injuries } } & \underline{ 6 \text { injuries } } & \underline{ 5 \text { injuries } }\
A & 0 & \$ 100 & \$ 700 \
B & 0 & \$ 50 & \$ 600 \
C & 0 & \$ 200 & \$ 500
\end{array}$
If all three firms provided safety training the marginal cost would be ___ and the marginal benefit would be ____

Question

The three firms shown below can choose among three workplace safety alternatives: continue with the status quo,provide safety training or purchase new safety equipment.The injury rates for the firms under the three alternatives as well as the costs of the alternatives are shown in the table.The cost of treating an injury is $200. $\begin{array}{cccc}
& \text { Status Quo } & \text { Safety Training } & \text { New Safety Equipment } \
\underline { \text { Firm } } & \underline { 7 \text { injuries } } & \underline{ 6 \text { injuries } }  & \underline{ 5 \text { injuries } }\
A & 0 & \$ 100 & \$ 700 \
B & 0 & \$ 50 & \$ 600 \
C & 0 & \$ 200 & \$ 500
\end{array}$
If all three firms provided safety training the marginal cost would be ___ and the marginal benefit would be ____

Quizplus · Accepted Answer

The marginal cost of providing safety training is the additional cost incurred by all three firms if they all provide safety training. This is $100 + $50 + $200 = $350. The marginal benefit of providing safety training is the reduction in injury rates for all three firms if they all provide safety training. This is 7 - 6 - 5 = 4 injuries, which is worth $4 * $200 = $800.

The Three Firms Shown Below Can Choose Among Three Workplace