In the textbook chapter under consideration for this module of the course, the authors argue that, as more safety is added, the total benefits increase, but at a decreasing rate. Lets say that you are a person who is trying to assess what level of safety is best, and you estimate the amounts contained in the table below, which reflects the total utility (measured roughly in dollar terms) increasing at a decreasing rate. By drawing several small straight lines connected into one large curve, draw your total benefit curve for safety on the graph following the table below. Level of Safety (Percentage of Total Safety) Total Benefit (Thousands of Dollars) 0 0 10% 20 20% 38 30% 54 40% 68 50% 80 60% 90 70% 98 80% 104 By drawing several small straight lines connected into one large curve, draw your total benefit curve for safety on the graph below. 2. On the cost side, our authors suggest that, as more safety is obtained the total cost also increases, but at an increasing rate. In your case, similar to what was presented previously, that reality is reflected in the table below. Level of Safety (Percentage of Total Safety) Total Cost (Thousands of Dollars) 0 0 10% 3 20% 8 30% 15 40% 24 50% 35 60% 48 70% 63 80% 80 By drawing several small straight lines connected into one large curve, draw your total cost curve for safety on the same graph above. 3. From a visual examination of the graph in #1 and #2 above, what level of safety, in percentage terms to the nearest 10%, is optimal? _________ 4. In the table below, combine the two tables above into one table so that you can then easily calculate the net benefits from various levels of safety. Fill in the table below. Level of Safety (Percentage of Total Safety) Total Benefit (Thousands of Dollars) Total Cost (Thousands of Dollars) Net Benefits 0 0 0 0 10% 20 3 17 20% 38 8 30 30% 54 15 39 40% 68 24 44 50% 80 35 45 60% 90 48 42 70% 98 63 35 80% 104 80 24 5. From an examination of the table in #4 above, what level of safety, in percentage terms to the nearest 10%, is optimal? __50_______ 6. The table from #1 above representing the total benefits curve is duplicated below for your convenience. Fill in the marginal benefit curve in the right-hand column of the table. Level of Safety (Percentage of Total Safety) Total Benefit (Thousands of Dollars) Marginal Benefit (Thousands of Dollars) 0 0 0 10% 20 20,000 20% 38 18,000 30% 54 16,000 40% 68 14,000 50% 80 12,000 60% 90 10,000 70% 98 8,000 80% 104 6,000 7. The table from #2 above representing the total cost curve is duplicated below for your convenience. Fill in the marginal cost curve in the right-hand column of the table. Level of Safety (Percentage of Total Safety) Total Cost (Thousands of Dollars) Marginal Cost (Thousands of Dollars) 0 0 0 10% 3 3,000 20% 8 5,000 30% 15 7,000 40% 24 9,000 50% 35 11,000 60% 48 13,000 70% 63 15,000 80% 80 17,000