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- Subject
- Public Goodseconomics-mcqs › public-goods
- Published
- 1 Jun 2019
- Last updated
- 28 May 2026
If mandating helmet use for motorcycle riders lowers the lifetime risk of fatality from 0.3% to 0.2%, and the total cost of helmets over a rider's lifetime is Rs 5000, at what minimum valuation of a human life would it be economically justified for the government to enforce helmet laws?
Multiple choice question for Public Goods. Select an option, then review the explanation below.
Explanation
The government should require helmets if the monetary value assigned to a human life exceeds the cost-effectiveness threshold. Since helmets reduce fatality risk by 0.1% (0.3% - 0.2%) at a cost of Rs 5000, the value of a statistical life must be at least Rs 500,000 for the mandate to be efficient.
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Practice related questions from the same subject.
- 1.What term describes a good from which individuals can be prevented from accessing or using it?
- 2.Which of the following best illustrates a common resource?
- 3.Which type of good is impacted by a negative externality in a way that reduces market efficiency?
- 4.Which type of good does a positive externality influence market efficiency similarly to?
- 5.Who is described as a free rider in economic terms?