Imagine that you are trying to decide whether to cross a street without using the designated...

Imagine that you are trying to decide whether to cross a street without using the designated crosswalk at the traffic signal.

a. What are the expected marginal benefits of crossing?

b. What are the expected marginal costs?

c. How would the following conditions change your benefit–cost equation? What would be the rational decision in each case and why?

i. The street was busy.

ii. The street was empty, and it was 3:00 A.M.

iii. You were in a huge hurry.

iv. There was a police officer 10 metres away.

v. The closest crosswalk was 1 kilometre away.

vi. The closest crosswalk was 5 metres away.

Solutions

Expert Solution

Answer a). Expected marginal benefits of crossing without designated crosswalk are following.

Time Saving, as on crosswalk there must be crowd and will take more time to cross the road.
The street are comparatively empty due to less traffic, so road can be crossed quickly.
More cautious while crossing the road as I know that I am crossing without a crosswalk.
It is convenient, as it will save the walk to nearest available crosswalk.

b). Expected marginal costs :

More time consuming if the street is busy.
High probability of meeting with an accident as the drivers don't expect public to cross the road from that location.
A police officer might be present there.

c). 1. The street was busy.: If the street is busy, the marginal benefit will reduce and it will be a good decision to cross from a crosswalk only.

2. The street was empty, and it was 3:00 A.M: Here the MB is higher as it will save the time to walk to the crosswalk. It will save time if crossed without crosswalk.

3. You were in a huge hurry.: Will cross without crosswalk as it is time saving.

4. There was a police officer 10 meters away. Here the marginal cost will be more as crossing without crosswalk may cause monetary loss or if caught by the police it will take away all the benefits of crossing without crosswalk.

5. The closest crosswalk was 1 kilometre away.=> Marginal benefit will be more if crossed the road without crosswalk as it will save time and efforts to walk till the crosswalk.

6. The closest crosswalk was 5 meters away.=> Better to take crosswalk as it wont impact much on benefit.

Rahul Sunny answered 11 months ago

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