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The government has undertaken a highway bridge project that was originally projected to cost $2 million and provide benefits of $2.5 million. Unfortunately, the costs have been much higher than anticipated. The government has spent $1.2 million so far and now expects that it will cost an additional $2.2 million to finish the project. Should the project be completed or abandoned? Why?
Consider the following insurance market. There are two states of the world, B and G, and two types of consumers, H and L, who have probabilities pH =0.5 and pL =0.25 (high and low
total revenue
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