2) (15 points). Suppose we are using a revealed preference approach to measure the value of a statistical life (value people place on risk reduction). We compare two jobs: risky and safe. In the risky job, workers have a 1% increased risk of dying compared to the safe job per year. Workers in the risky job earn $100,000 per year while workers in the safe job earn $60,000 per year. a) Using this information, calculate the value of a statistical life. (Hint: compute the difference in earnings per year and divide by the difference in mortality risk per year] b) Briefly explain why economists favors such a revealed preference approach to measuring costs/benefits compared to some of the other approached discussed in chapter 8. c) Briefly describe some of the limitations of such a revealed preference approach. 2) (15 points). Suppose we are using a revealed preference approach to measure the value of a statistical life (value people place on risk reduction). We compare two jobs: risky and safe. In the risky job, workers have a 1% increased risk of dying compared to the safe job per year. Workers in the risky job earn $100,000 per year while workers in the safe job earn $60,000 per year. a) Using this information, calculate the value of a statistical life. (Hint: compute the difference in earnings per year and divide by the difference in mortality risk per year] b) Briefly explain why economists favors such a revealed preference approach to measuring costs/benefits compared to some of the other approached discussed in chapter 8. c) Briefly describe some of the limitations of such a revealed preference approach