Question

The City of Minneapolis is deciding whether to install a stoplight or a stop sign at a very dangerous intersection. Every time a car goes through the intersection, it either is safe, gets in a minor accident, or gets in a major accident. The stoplight would prevent crashes more often, but they would be more costly if they did occur.

The City of Minneapolis performs 800800800 simulations of a car going through the intersection with a stoplight and with a stop sign. Once they decide whether to install a stoplight or a stop sign, they expect 400040004000 cars to travel through the intersection in the next year.
What is the expected damage at this intersection in the next year if the City of Minneapolis installs a stoplight? \$$dollar sign
What is the expected damage at this intersection in the next year if the City of Minneapolis installs a stop sign? \$$dollar sign
To minimize the expected damage, The City of Minneapolis should install a

.
(If necessary, round your answers to the nearest dollar.)
The following table shows damage from each type of accident depending on whether the City of Minneapolis installs a stoplight or a stop sign.
Stoplight Stop sign
Major accident \$900$900dollar sign, 900 \$700$700dollar sign, 700
Minor accident \$600$600dollar sign, 600 \$200$200dollar sign, 200
The following table shows the results from the traffic simulation.
Car result Stoplight Stop sign
Major accident 151515 191919
Minor accident 242424 313131
No accident 761761761 750750750
Total 800800800 800800800

Answer 1

Stoplight (75*$900) + (120*$600) + (3805 * $0) = $139500

Stopsign (95*$700) + (155*$200) + (3750* $0) = $97500

Explanation:

To minimize damage, a stop sign should be installed.