Explain how mandatory seat belt laws may reduce the negative externalities of risky behavior
What will be an ideal response?
Mandatory seat belt laws are designed to reduce the severity of injuries resulting from traffic accidents. By requiring all passengers in a vehicle to wear seat belts, the chances of serious injury are smaller, even when other drivers engage in risky behavior like speeding or reckless driving.
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What happens if the price of a product is below the equilibrium price?
A) There will be a surplus of the product. B) There will be an excess demand for the product. C) The buyers will stop purchasing a "cheap" product. D) The producer will lower the price to sell more product.
The opportunity cost of holding a dollar is
A) a dollar. B) the price of a government bond. C) less than a dollar. D) the interest yield that could have been earned by holding some other asset.