Q1 This summer you visit an island where the government is considering installing shark nets to...

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Q1 This summer you visit an island where the government is considering installing shark nets to protect swimmers from being eaten by sharks. You learn the following 5 facts: (i) Shark nets cost $10,000,000 per beach, and they last one year. During that year, they provide complete protection from shark attacks. (ii) Almost all of the people on the island pay $2 per year for crocodile repellant. The repellant reduces an individual's the probability of death from 2/1,000,000 (with no repellant) to 1/1,000,000 (with the repellant). (iii) Almost none of the people on the island pay $5 per year for asteroid protection devices. These devices reduce an individual's probability of death from 2/1,000,000 (with no device) to 1/1,000,000 (with the device). (iv) On some beaches, more than 50 people are eaten each year by sharks (because these beaches are shark-infested). On some other beaches, however, only 1 or 2 people are eaten by sharks each year (because few sharks live in the area). (v) The beaches are not ever crowded, and the effect of shark nets on beach use would be very minor. A) If the government seeks to implement efficient policy, what advice would you give? Explain your reasoning. B) Would your answer change if the beaches were very crowded and people were very homogeneous? Explain. Q1 This summer you visit an island where the government is considering installing shark nets to protect swimmers from being eaten by sharks. You learn the following 5 facts: (i) Shark nets cost $10,000,000 per beach, and they last one year. During that year, they provide complete protection from shark attacks. (ii) Almost all of the people on the island pay $2 per year for crocodile repellant. The repellant reduces an individual's the probability of death from 2/1,000,000 (with no repellant) to 1/1,000,000 (with the repellant). (iii) Almost none of the people on the island pay $5 per year for asteroid protection devices. These devices reduce an individual's probability of death from 2/1,000,000 (with no device) to 1/1,000,000 (with the device). (iv) On some beaches, more than 50 people are eaten each year by sharks (because these beaches are shark-infested). On some other beaches, however, only 1 or 2 people are eaten by sharks each year (because few sharks live in the area). (v) The beaches are not ever crowded, and the effect of shark nets on beach use would be very minor. A) If the government seeks to implement efficient policy, what advice would you give? Explain your reasoning. B) Would your answer change if the beaches were very crowded and people were very homogeneous? Explain.

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ANSWER A Efficient Policy Recommendation Given the information provided the government should consider the costeffectiveness of different options to m... View the full answer