2. The safety standard... a. Is determined by cost-benefit analysis. b. Encourages regulators to focus resources first on the largest risks. c. Aligns well with the objectives of the efficiency standard. d. Allocates disproportionately large amounts of resources on relatively small risks. e. Is an all-time classic song (and music video) by Montreal-based Men Without Hats.
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- 12. Consider the graph below. Marginal safety benefit → safety 0 S* no risk Which of the following statements is/are true? I s is the efficient level of safety. II OSHA sets standards to achieve a safety level of s*. A. Only I B. Only II C. I and II D. None of the above Marginal cost of safetyA number of coal burning steam locomotives pass by several largely populated towns each day spewing sulfur dioxide. Each coal burning steam locomotive is owned by a different company. a. Explain how the Coase theorem could work to achieve the optimal level of sulfur dioxide emissions. Explain how the achievement of the optimal level of sulfur can be hindered in reality for this particular problem. b. Assume that the true marginal abatement cost curve for all firms is not known to a regulator. If the marginal damages from sulfur dioxide is fairly constant at all levels of sulfur dioxide levels, what is the better type of policy to implement, a quota or a tax on sulfur dioxide emissions? Give a brief explanation of why you have chosen that particular policy. Use a graph to support your explanation.What is the rationale for FDA regulation of drugs? To protect the consumer from dangerous drugs Because physicians may not be knowledgeable about all the new drugs in the market Both a and b Neither a nor b
- II. True or False 1, Warranty can serve as a signaling device of a productliability, because consumers take more care about the product provided by reliable firm. 2. When using Hypothetical monopolist test to define the relevant market for a food delivery platform, it is important to do test not only on a small increase in the food delivery fee, but also the increasing comission charged on the restaurant side. 3, A firm with trusted brand has no incentive to cheat consumers because the fly-by-night profit of cheating is not attractive compared to the long run reputation premium. 4. After the milk crisis of 2008, despite the effort of some dairy firms to improve food safety, consumers are still skeptical for the domestic dairy product because their belief on food safety is based on the whole industry's past, instead of the individual firm's past.2. Classify the following as a government-enforced barrier to entry, a barrier to entry that is not government-enforced, or a situation that does not involve a barrier to entry. a. A city passes a law on how many licenses it will issue for taxicabsb. A city passes a law that all taxicab drivers must pass a driving safety test and have insurancec. A well-known trademarkd. Owning a spring that offers very pure watere. An industry where economies of scale are very large compared to the size of demand in the marketThe primary difficulty with command and control pollution regulation is that: a. It requires significant information to impose correct limits. b. It is costly for regulators to impose. c. It does not encourage the best use of abatement technologies. d. It has high compliance costs. e. All of the above..
- Adverse Selection. This section on Amazon illustrates the case of adverse selection faced by Amazon. The vendors have more information about their performance than Amazon has. Explain how and why Amazon can use the customer reviews to control this problem.share your thought about the future of regulatory and market driven approaches to contain costs and current trends.2. Classify the following as a government- enforced barrier to entry, a barrier to entry that is not government-enforced, or a situation that does not involve a barrier to entry. a. A city passes a law on how many licenses it will issue for taxicabs b. A city passes a law that all taxicab drivers must pass a driving safety test and have insurance c. A well-known trademark d. Owning a spring that offers very pure water e. An industry where economies of scale are very large compared to the size of demand in the market
- 1) A decision-maker should acquire new information Select one: a. Only when the information is highly unreliable. b. Only if its expected value is greater than the cost of acquiring it. c. Only if its cost is high. d. Whenever the information will have no impact on the manager's decision. 2) A monopoly industry is characterized by a Select one: a. More than 5 firms dominating the industry. b. Large number of small firms dominating the industry. c. Single-firm dominating the industry d. none of these 3) Cobb Douglas function is related to Select one: a. relationship between Production outputs and inputs b. none of these c. Law of supply d. Law of demand 4) Consumer surplus is defined as Select one: a. the difference between the amount that the consumer is willing to pay and the amount that she is actually charged b. None of these c. the sum of the amount that the consumer is willing to pay and the amount that she is actually charged d. the amount that the consumer is willing to payThe global pandemic 2020 has promoted a race to capture the market for introducing effective vaccine and treatments. Output Price/Unit Total Cost 1 5500 1000 2 5000 1200 3 4500 1500 4 4000 2500 5 3500 4000 6 3000 5700 7 2500 7500 8 2000 9400 9 1500 11400 10 1000 13500 a. Assume if many firms enter into the business of providing vaccine determine: How the demand curve of PFIZER would change and how it would now maximize its profit? The kind of market structure now PFIZER is forced to operate in? Also, illustrate the same using the two-dimensional labeled diagram.1. Identify which restrictive practices are described in the following scenarios: A. Exclusive dealings B. Bundling C. Tying sales ? 1. The release of a very popular movie franchise will only take place in Cinemark movies theaters 2. You can buy a XYZ laptop for 500 dollars and a XYZ printer for 250 dollars, but with a special promotion you can buy both for 650 dollars 3. To purchase a textbook, a student is required to purchase a study guide as well Next >
