Which Argument Against Enacting Workplace Safety Regulations Can Be Justified

question 4

Multiple Choice

Which argument against enacting workplace safety regulations can be justified using economic tools or observation?

• A)If the value workers place on a safety device is greater than the cost of providing it, then firms in a perfectly competitive labor market will want to install the device.
• B)Historically, employers have provided safe working environments without regulation.
• C)According to the cost-benefit principle, the marginal cost of safety virtually always exceeds the marginal benefit.
• D)Insurance will cover most workplace injuries, so the safety regulations are unnecessary.

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Definitions:

Implicit Costs

The firm’s opportunity costs of using resources owned or provided by the owner.

Explicit Costs

Dollar costs incurred by business firms, such as wages, rent, and interest.

Implicit Costs

The opportunity costs that are not directly incurred but represent the loss of alternative benefits when choosing one option over another.

Explicit Costs

Direct, out-of-pocket payments for goods and services required to run a business.