The costs of many environmental regulations can be calculated in dollars but the benefits often are in terms of lives saved (mortality) or decreases in the incidence of a particular disease (morbidity)
What does this imply about the cost-benefit analysis of environmental regulations? There is an old saying "You can't put a price on a human life." Do you agree or disagree? Explain.
We will need to translate the mortality and morbidity data into dollars if we are going to compare the costs and benefits of environmental regulation. For example, if we knew that a new regulation would impose a cost of $20 million on firms and that it would save one life, we would need to know whether a life is worth more than $20 million or less than $20 million. As ghoulish as these efforts to place a dollar value on a life may sound, government (and individuals, for that matter) need to make these calculations implicitly or explicitly. There is very substantial economic literature on the value of a life. Most studies estimate the value of a life in the range of $7 million to $9 million.
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According to economists, the lack of clear property rights will:
A. remove the proper incentives to invest in the future. B. encourage more incentives to invest in the future. C. lower the costs of investing in the future. D. All of these are correct.
If the opportunity cost of 1 wristwatch is 4 wall clocks in Japan and 2 wall clocks in Germany, it makes sense for Germany to produce wristwatches.
Answer the following statement true (T) or false (F)
Which of the following is NOT a characteristic of a market in equilibrium?
A. There is neither excess supply nor excess demand. B. Sellers can sell as many units as they want at the equilibrium price. C. Neither buyers nor sellers want the price to change. D. Buyers can buy as many units as they want at the equilibrium price.
?The difference between the LPM model and the logit and probit models is that:
A. ?the LPM assumes constant marginal effects for all the independent variables, while the logit and probit models imply diminishing magnitudes of the partial effects. B. ?the LPM assumes constant marginal effects for some of the independent variables, while the logit and probit models imply diminishing magnitudes of the partial effects. C. ?the LPM assumes constant marginal effects for the dependent variable, while the logit and probit models imply diminishing magnitudes of the partial effects. D. ?the LPM assumes different marginal effects for all independent variables, while the logit and probit models imply diminishing magnitudes of the marginal effects.