Victim V works at a job where he might be exposed accidentally to a chemical that increases the probability from .01 to .02 of dying from lung cancer in 20 years. V would pay $15,000 to avoid exposure to this risk, or he would accept $15,000 to expose himself to this risk. No matter how hard he tries, V cannot imagine any sum of money that he would accept in ex- change for certain death by lung cancer. V’s employer accidentally exposes him to the chemical. The risk materializes after 20 years, and V dies abruptly from lung cancer. How much are Hand rule damages for V’s heirs? After exposure and before dying, V spent $1000 to move to another neighborhood with better air quality. Should $1000 be added to Hand rule damages, or is it already implicitly included?

HAND RULE DAMAGES ARE : THEY EQUAL THE REASONABLE BURDEN OF PRECAUION DIVIDED BY THE RESULTING REDUCTION IN THE PROBABILIY OF HARM. AS V IS INDIFFERENT BETWEEN $15000 INCREASE AND AN INCREASE OF .01 IN THE PROBABILITY OF CANCER DEATH.

THUS HAND RULE DAMAGES ARE $15000 / 0.1 = $1.5 MILLION.

SINCE IT IS AN OBJECTIVE COST AND SINCE V WAS INDIFFERENT AS NO COST WAS ACCEPTABLE FOR HIS LIFE , SO IT IS IMPLICITLY INCLUDED

Explanation:

HAND RULE DAMAGES ARE : THEY EQUAL THE REASONABLE BURDEN OF PRECAUION DIVIDED BY THE RESULTING REDUCTION IN THE PROBABILIY OF HARM. AS V IS INDIFFERENT BETWEEN $15000 INCREASE AND AN INCREASE OF .01 IN THE PROBABILITY OF CANCER DEATH.

THUS HAND RULE DAMAGES ARE $15000 / 0.1 = $1.5 MILLION.

SINCE IT IS AN OBJECTIVE COST AND SINCE V WAS INDIFFERENT AS NO COST WAS ACCEPTABLE FOR HIS LIFE , SO IT IS IMPLICITLY INCLUDED.

support your answer using the data presented. (5 points). 4. based on the information you used to schedule and curve, which product would you recommend the shoe hut focus on, and why? provide details that support your answer. (5 points).