Workers Do Not Know the Safety Records at Individual Firms;

question 90

Multiple Choice

Workers do not know the safety records at individual firms; they only know industry averages.As a result,

• A) each firm tries to outdo each other in making safety improvements.
• B) each firm has the incentive to be the safest in its industry.
• C) the equilibrium level of safety is less than optimal.
• D) the optimal level of safety is achieved.

---

Definitions:

Excise Tax

A tax imposed on specific goods, services, or activities, often aimed at discouraging their use or raising revenue for government.

Price Elasticity

A measure of the sensitivity of demand or supply for a product or service to changes in its price.

Incidence

The measure or rate at which a particular phenomenon occurs, often used in the context of disease or taxation.

Perfectly Elastic

Describes a situation in which the quantity demanded or supplied reacts to the smallest change in price with an infinite amount of change in quantity.