1. Two alternative programs to save 50 more lives per year entail providing more cardiac intensive care facilities and redesigning dangerous highway interchanges. The price of a new cardiac intensive care unit is $500,000, and the price of redesigning and renovating a highway interchange is $1 million. One combination of the two programs that can save 500 lives is five cardiac units and three highway exit renovations. a.) Is the mix involving five cardiac units and three highway exit renovations cost-effective? b.) Assuming that the marginal products of both programs decline, what needs to be done to achieve the cost-effective mix of programs?

1. Two alternative programs to save 50 more lives per year entail providing more cardiac intensive care facilities and redesigning dangerous highway interchanges. The price of a new cardiac intensive care unit is $500,000, and the price of redesigning and renovating a highway interchange is $1 million. One combination of the two programs that can save 500 lives is five cardiac units and three highway exit renovations. a.) Is the mix involving five cardiac units and three highway exit renovations cost-effective? b.) Assuming that the marginal products of both programs decline, what needs to be done to achieve the cost-effective mix of programs?

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Frontiers Of Microeconomics

Section: Chapter Questions

Problem 4PA

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