Suppose That in Most Car Collisions Between Cars of Unequal

question 101

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 and that every person in the economy drives at least one car.
Refer to the information above.As the average size of cars increases,the incentive to buy a smaller car:

• A)also increases due to cost savings at the fuel pump.
• B)also increases to offset the external cost of air pollution.
• C)decreases because of the increased risk of injury in a collision.
• D)remains the same because car purchases depend on individual preferences.

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Definitions:

Time Inconsistency

The tendency of individuals to change their plans or preferences over time in ways that they themselves will later regard as being against their own interests.

Myopia

Short-sightedness, in a business context, refers to a focus on short-term results at the expense of long-term interests.

Conceptualizing The Future

The process of envisioning and planning for future trends, changes, and developments in an industry or society.

Myopia

Short-sightedness in planning and decision-making, where immediate benefits are prioritized over long-term gains.