Calculate the marginal benefit to society from the purchase of a PET scanner. Yes or no...

Calculate the marginal benefit to society from the purchase of a PET scanner. Yes or no on purchase in the decision column. Probability that One cancer fatality could be at Prevented By a PET Scan Value of One Life Estimated Benefit Cost of the Scanner Decision 1 in 1,000,000 x = 1 in 1,000 x = 1 in 10 x = 1 in 2 x = The cost of the scanner is $800,000. The value of one life is elevated to $10,000,000 now :)

Expert Solution

Following table can be generated with the help of given information

Probability that one cancer fatality could be prevented by a PET Scan			Value of one life		Estimated benefit	Cost of the Scanner	Decision
1 in 1000000 =	0.000001	X	10000000	=	10	800000	No
1 in 1000 =	0.001	X	10000000	=	10000	800000	No
1 in 10 =	0.1	X	10000000	=	1000000	800000	Yes
1 in 2 =	0.5	X	10000000	=	5000000	800000	Yes

In case of probability being 1 in 1000000, estimated benefit is lower than its cost. It is not advisable to purchase PET scanner in this case.

In case of probability being 1 in 1000, estimated benefit is lower than its cost. It is not advisable to purchase PET scanner in this case.

In case of probability being 1 in 10, estimated benefit is higher than its cost. It is advisable to purchase PET scanner in this case

In case of probability being 1 in 2, estimated benefit is higher than its cost. It is advisable to purchase PET scanner in this case

Rahul Sunny answered 2 years ago

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Calculate the marginal benefit to society from the purchase of a PET scanner. Yes or no...

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