The U.S. government does not allow toggle switches for power windows in automobiles. The National Highway Traffic Safety Administration found that the regulation will save about two children every three years and have negligible costs because the industry will have plenty of time to incorporate new switches into future vehicles. Evaluating this rule in terms of costs and benefits, an economist most likely would conclude that:
A. it is a bad decision because the chances of a child dying (less than one per year) are so small that they can be ignored.
B. we cannot tell if it is a good decision without knowing the ages of the children who might be saved by the regulation.
C. it fails because it should take effect immediately, not after four years.
D. it is a good decision because the benefits exceed the costs.
Answer: D
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In the case of perfect complements, more is not necessarily better. ?
Answer the following statement true (T) or false (F)
The use of chlorofluorocarbons in refrigerators and air conditioners is alleged to cause the destruction of the ozone layer that surrounds the earth and protects humans from ultraviolet radiation. Output of this substance has been restricted by a licensing system where producers have to bid in the open market for licenses to produce them in specified quantities. This is an example of dealing with externalities by
A. voluntary compliance. B. direct controls. C. taxes. D. cap-and-trade.
Suppose that for Merv the marginal utility of $50-per-serving caviar is 100 and the marginal utility of $1-per-serving popcorn is 10 . For his snack, Merv should buy:
a. the caviar if he has the $50; otherwise, the popcorn. b. the caviar if he has the $50; otherwise, nothing. c. the popcorn, whether he has the $50 or not. d. one serving each of the caviar and popcorn, if he has $51. e. five servings of popcorn for each serving of caviar.
The purpose of measuring the overall level of prices in the economy is to permit comparison between dollar figures from different times
a. True b. False Indicate whether the statement is true or false