Final answer:
To determine how many people must be affected by the policy for the benefits to exceed the costs of implementing a regulation, we use the given probability of death and the value of human life to find that at least 401 people must be affected by the policy.
Step-by-step explanation:
The question is a cost-benefit analysis scenario in which we need to find the number of people that must be affected by a policy for its benefits to exceed the costs. This involves comparing the monetary cost of implementing a regulation to the value of lives potentially saved by that regulation. The Occupational Safety and Health Administration (OSHA) has determined that the probability of a worker dying from a particular hazardous chemical is 0.008, and given that the value of a human life is assumed to be $10 million, we set up an equation to find the break-even number of workers. The calculation is:
0.008 (Chance of death from chemical exposure) x Value of human life (V) x Number of people affected by the policy (N) > Cost of imposing regulation
Assuming V = $10 million and the cost of regulation is $32 million, solve for N:
0.008 x 10,000,000 x N > 32,000,000
N > 32,000,000 / (0.008 x 10,000,000)
N > 400
Since we are looking for the whole number of people that must be affected, and N must exceed 400, the closest whole number that is not less than 400 is 401. Therefore, 401 people must be affected for the benefits of the policy to exceed the costs.