Suppose That in Most Car Collisions Between Cars of Unequal

question 80

Multiple Choice

Suppose that in most car collisions between cars of unequal size, the smaller car sustains the most damage and its occupants suffer the most injury. In answering the following question, assume that, on average, smaller cars generate less air pollution than larger cars and that every person in the economy drives at least one car. In deciding what kind of car to buy, individuals:

• A)will fully internalize the safety benefit to others of driving a small car.
• B)will fully internalize the full cost of the air pollution caused by larger cars.
• C)will have a strong incentive buy large cars because large cars are safer than small cars.
• D)not consider their own safety in deciding what kind of car to buy.

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Definitions:

Indifference Map

A graphical representation of a consumer's preferences for different combinations of goods, where each curve indicates all combinations that offer the same level of satisfaction or utility.

Indifference Curves

Graphs showing combinations of goods or services among which a consumer is indifferent, reflecting preferences and trade-offs.

Units of Coffee

Quantitative measures used to specify a particular amount of coffee, often in terms of volume, weight, or number of containers.

Units of Tea

Specific quantities or measures used to define the amount of tea, typically expressed in grams, ounces, or tea bags.