A state highway safety agency must allocate its budget for the next fiscal year. A total funding of $32 million has been granted for reducing fatalities and property damage due to automobile accidents. However, detailed funding decisions concerning specific programs remain to be made. The table lists pertinent data on four major programs.

To solve its budget problem, the council still must formulate a tradeoff between lives saved and property damage prevented. The council is aware that a certain government agency employed $4.8 million as the value of a life saved. To make a start on its decision, members of the council have agreed to use this figure, enabling it to put a dollar value on the total benefits (from lives and property saved) of a given expenditure on each program.
a. Find the budget allocation that generates the greatest total benefits. (Where should the first dollars be spent, the next dollars, and so on?)
b. Suppose the council increases the value of a life to $7.2 million. How does the value placed on a life influence the council€™s budget allocation? Explainbriefly.

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Expected Fatalities Prevented per Millions of Dollars Expended Expected Reduction in Property Damage per Millions of Dollars Expended Upper Limit on Expenditures Project Seat-belt advertising $14,000,000 1.0 $0 Research in nproved highway safety 12000,000 .2 3,200.000 Research in improved auto design 9,000,000 .5 1,500,000 Dollars spent lobbying for tougher drunk driving penalties 16,000,000 .15 200,000