Your State Is Considering Enacting a Law Requiring That All

question 39

Multiple Choice

Your state is considering enacting a law requiring that all motorcycle operators and their passengers wear a helmet.Motorcyclists vary in the degree to which they value being able to ride helmet-less and in the extent to which they value the safety provided by a helmet.
Without the regulation,who would wear a helmet?

• A)cyclists and passengers for whom the marginal benefit of increased safety is greater than or equal to the expected cost of being in a serious accident.
• B)cyclists and passengers for whom the marginal benefit of increased safety is greater than or equal to the purchase price of a helmet.
• C)cyclists and passengers for whom the marginal benefit of increased safety is greater than or equal to the lost value of riding helmet-less.
• D)cyclists and passengers for whom the marginal benefit of increased safety is greater than or equal to the lost value of riding helmet-less plus the purchase price of a helmet.

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Definitions:

Marginal Costs

The extra expense generated from the production of an additional unit of a product or service.

R&D Costs

Expenses related to the research and development activities of a company, often aimed at discovering new products or improving existing products.

Easy-to-Copy Products

Products that can be replicated or imitated with ease due to their simple designs, lack of patent protection, or the availability of manufacturing techniques.

Stimulate Innovation

Encourages the development of new ideas, products, or processes to improve efficiency, effectiveness, or competitive advantage.