Question

Suppose that the Town of Mapledale is considering hiring an additional firefighter. The expected benefit is estimated to be worth $5 for each of Mapledale's 15,000 residents. What should the city do?
A. Hire the firefighter because additional fire protection is priceless.
B. Hire the firefighter if the cost of the new firefighter is less than $75,000.
C. Hire the firefighter only if the benefit to the residents exceeds $75,000.
D. Do not hire the firefighter because the costs exceed the benefits.

Answer 1

Answer:

(B) Hire the firefighter if the cost of the new firefighter is less than $75,000.

Explanation:

The city should hire the Firefighter only if the cost of new firefighter is less than $75,000.

Since $5 x 15000 residents = $75, 000.

Therefore it is still beneficial to hire a new firefighter if the cost is less than $75, 000