Question 3 - Cost Benefit Analysis Suppose that there 2 types of tractors: FT200, which costs $132,000; and FT250, which costs $135,000. The only difference between them is that FT250 come with Automatic Emergency Braking. Assume further that 3 thousand farmers paid the extra $3,000 to buy an FT250 and that: There is 1 fatal accident for every 1,000 FT200 tractors sold - There is 1 fatal accident for every 3,000 FT250 tractors sold . Calculate the value of a statistical life of a farmer buying FT250. Next, use this number to estimate the benefits of the following government regulation aiming to regulate tractors: - Safety First Act: Companies producing tractors must install Automatic Emergency Braking in their tractors. - Cost: $5 billion because of higher costs to produce Benefit: 1,250 fewer farmers would die - Calculate the total benefit of this policy and state whether the monetary benefits are larger than its costs. . . Question 3 - Cost Benefit Analysis Suppose that there 2 types of tractors: FT200, which costs $132,000; and FT250, which costs $135,000. The only difference between them is that FT250 come with Automatic Emergency Braking. Assume further that 3 thousand farmers paid the extra $3,000 to buy an FT250 and that: There is 1 fatal accident for every 1,000 FT200 tractors sold - There is 1 fatal accident for every 3,000 FT250 tractors sold . Calculate the value of a statistical life of a farmer buying FT250. Next, use this number to estimate the benefits of the following government regulation aiming to regulate tractors: - Safety First Act: Companies producing tractors must install Automatic Emergency Braking in their tractors. - Cost: $5 billion because of higher costs to produce Benefit: 1,250 fewer farmers would die - Calculate the total benefit of this policy and state whether the monetary benefits are larger than its costs