Assume Barbara likes driving fast, but hates getting injured. If Congress passes a law for mandatory airbags, Barbara is likely to experience an increased number of accidents. Why?
A. The expected cost of an accident at any given speed decreases.
B. Barbara is confident that she can drive flawlessly since others will have airbags.
C. The benefits of driving fast increase.
D. Barbara will defy the law and not have airbags, since she thinks no one is going to enforce installing airbags in cars.
Answer: A
You might also like to view...
In monopolistic competition, each firm's marginal revenue curve lies ________ its demand curve because of ________
A) below; barriers to entry B) below; product differentiation C) above; barriers to entry D) above; product differentiation
Which of the following would cause the current account to decrease?
A) an increase in the nominal exchange rate, E B) an appreciation of the home currency C) an increase in disposable income D) an increase in foreign prices, P E) a decrease in domestic prices, P
Why do firms engage in price discrimination?
A) to decrease cost B) to increase profits C) to increase consumer surplus D) to prohibit the resale of their products
What percentage of the U.S. population was subjected to the 1913 income tax?
a. 1 percent b. 5 percent c. 10 percent d. 15 percent