Suppose a treacherous stretch of road winds through Deadman's Canyon for 5 miles.A highway department study estimates that better lighting would reduce the traffic fatality rates as follows: $\begin{array}{ccc}
\text { Number of lights } & \text { Estimated deaths per year } & \text { Total installation cost (in millions) } \
0 & 3 & \$ 0 \mathrm{~m} \
1 & 2 & \$ 3 \mathrm{~m} \
2 & 1.5 & \$ 7 \mathrm{~m} \
3 & 1.2 & \$ 12 \mathrm{~m} \
4 & 1 & \$ 18 \mathrm{~m} \
5 & 0.9 & \$ 25 \mathrm{~m}
\end{array}$
According to the basic rule for allocating crime control resources,the optimal amount of crime control occurs when

Question

Quizplus · Accepted Answer

The basic rule for allocating crime control resources suggests that the optimal amount of crime control is achieved when the marginal benefits of reduced crime equal the marginal cost of crime reduction. In this case, the benefits are measured in terms of the estimated deaths per year that could be prevented with better lighting on the stretch of road through Deadman's Canyon. The costs are measured in terms of the total installation cost for each level of lighting. The table shows that the estimated number of deaths per year decreases as more lights are installed, but the cost of installation increases. The point at which the marginal benefit of reduced deaths equals the marginal cost of installation is when two lights are installed, at a cost of $7 million. Therefore, the best choice would be to install two lights on the stretch of road through Deadman's Canyon.

Suppose a Treacherous Stretch of Road Winds Through Deadman's Canyon