Recall the Application about how having car insurance affects driving behavior to answer the following question(s).Recall the Application. Explain the effect of mandatory car insurance laws on the number of traffic accidents and fatalities.
What will be an ideal response?
When car insurance is mandatory, the number of insured drivers increases. When drivers are insured, the theory of moral hazard suggests that they will drive less carefully than an uninsured driver, since the insured driver will bear less than the full cost of a collision. When drivers are less careful, the number of traffic accidents and traffic fatalities increases.
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Fill in the blank: National income accountants define a(n) ________ good as something purchased without the goal of reselling it or further processing or remanufacturing it into another sellable good
A) scarce B) intermediate C) final D) finished E) completed
For health care, the perceived marginal benefit ________ the marginal social benefit
A) is less than B) is greater than C) is equal to D) cannot be compared to
A subway token does not fulfill the three functions of money
Indicate whether the statement is true or false
If the price of a haircut increases,
a. haircuts become more expensive relative to other goods and services b. haircuts become less expensive relative to having a friend cut your hair c. people will have their hair cut more often d. haircuts become less expensive relative to other goods and services e. the budget constraint will shift outward