VI. The benefits of government projects often include reductions in risks to human life, so decisions about the desirability of such projects often depend on the valuation of risks to life. A. Discuss the advantages of using explicit rather than implicit values. B. Suppose that the average American would be willing to pay $750 to reduce their annual risk of dying by 0.0001. What is their average VSL? C. If a project with an annualized cost of $140 million dollars would save an average of twenty lives per year, would it be likely to be worthwhile under each of the following assumptions about the population affected by the project? 1. It is similar in all relevant respects to the total population. 2. It is poorer on average than the population of America as a whole. 2 3. It consists of people who work in high-risk occupations. 4. Its average age is much older than the average American. VII. Suppose that the annual demand for air travel is Q = 1,500 500R, where Q is millions of passenger miles per year and R is the fatality risk per million passenger miles. A. If the fatality risk per million passenger miles is 2: 1. What would be the value of Q? 2. What would be the number of fatalities? B. Now suppose that the fatality risk per million passenger miles is reduced to one because of a government regulation requiring new safety equipment. 1. What would be the value of Q? 2. What would be the number of fatalities? C. What would be the annual number of statistical lives saved because of the regulation? D. Would there be any benefits from requiring the safety equipment