The US Government Does Not Allow Toggle Switches for Power Windows

question 21

Multiple Choice

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 good decision because the benefits exceed the costs.
• B) it fails because it should take effect immediately, not after four years.
• C) 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.
• D) we cannot tell if it is a good decision without knowing the ages of the children who might be saved by the regulation.

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Definitions:

Early Payment

A financial transaction where a debt or obligation is settled before its due date.

Credit Period

The duration of time the buyer is given to pay for a purchase after the goods are delivered or the services are provided.

Discount Period

The time frame during which a buyer can pay less than the full invoice amount due to early payment incentives.

Sales Tax

A government-imposed tax on sales of goods and services, typically collected at the point of sale from consumers.