A firm produces nail guns, which have the potential to cause injury. The safety of each nail gun can be improved if the firm spends more on safety. For a given level of expenditures on safety improvements, the corresponding probability of loss is given in the following table. Assume that an accident imposes costs on a victim equal to $50,000.

Probability of Loss	Safety Expenditures
0.03	$0
0.02	$100
0.015	$225
0.012	$375
0.01	$530
0.008	$705

Do not include dollar signs "$" in your answer.

1. (2 marks) What is the optimal amount spent on safety devices from a societal perspective?

2. (2 marks) Although the expected severity is $50,000, it is known that courts do not compensate for pain and suffering. Specifically, the total amount awarded is anticipated to be $30,000. In this case, how much would the manufacturer spend on safety?