Drawing a supply and demand graph

Reference no: EM1374805

Since 1997, at least three million vehicles have been recalled due to air bag related troubles. Of these, roughly half were due to troubles of the sort that only time and road experience are likely to reveal.

Automobile air bags were originally designed as supplemental safety devices to be used along with a combination shoulder- and lap-seat belt. For twenty years the auto manufacturers argued that, after looking at the costs, passengers were better off with just seat belts. The activists hissed with contempt at this assertion ignoring the industry's voluntary installation of the collapsible steering wheel, the padded dash, and the high-penetration windshield. They, maintaining that the auto companies were not interested in selling safety, insisted on a federal mandate. They got it in Standard 208 which required the installation of air bags to protect an unbelted, 170-pound man in a head on collision (my emphasis).

Seat belt usage went from 10 percent in the early 1970s to 70 percent in the 1990s. What group was the most likely nonuser of seat belts? Teenagers and young adults, that's who.

There is a small problem with airbags - they are dashboard-mounted bombs that kill children and small adults in accidents they would otherwise walk away from. As Ward's Auto World, an industry bible once put it, "For the sake of protecting Beavis and Butt-Head, we have put infants, young children, and small adult women at risk."

To a large extent, the problem is caused by the precautionary principle that is typically applied to R & D and commercial products that can actually increase risk. This principle focuses solely on the possibility that new technologies can pose extreme or unmanageable risks, even after considerable testing has occurred. The fact is that while new technologies introduce new risks, most offer net benefits. Most advocates of precautionary regulation are more anti-business and anti-technology than they are pro-safety.

ANSWER THE QUESTIONS BELOW IN 210 WORDS ( total for the 5 questions, not each question)

1. What kind of goods would an economist call air bags?

2. According to the article, is this a failure of the market or a failure of government?

3. Is this an example of a price ceiling or a price floor?

4. If you were drawing a supply and demand graph of this market, would either of the curves move, and if so which one?

5. Should air bags be outlawed

Reference no: EM1374805

Questions Cloud

Evaluate the tax on the total cumulative gifts : How do I evaluate the tax on the total cumulative gifts of 1,548,000? The answer is given to us which is 577,400 but we require to show how we got to that answer. Please help.

Differences among the flexible as well as the static budget : You are in a job interview as well as your possible employer asks you to define the differences between the flexible as well as the static budget and to explain which you would recommend for a small business and why

Explain how to conduct an analysis of clients insurability : As part of an insurance business's training program, participants learn explain how to conduct an analysis of clients' insurability. Which of participants would you judge to be capable.

Evaluate the total number of dinner cruises : Evaluate the total number of dinner cruises that Luxury Cruiseline must sell to break even and determine the number of regular cruises and executive cruises company must sell to breakeven.

Drawing a supply and demand graph : Since 1997, at least three million vehicles have been recalled due to air bag related troubles. Of these, roughly half were due to troubles of the sort that only time and road experience are likely to reveal.

Allocate production capacity to encounter demand : Josie Gall's firm has developed the subsequent supply, demand and cost and inventory data. Allocate production capacity to encounter demand at a minimum cost the transportation method.

Describe price-break inventory model : Assume that annual demand for a part is 40,000 units, ordering cost. Using a price-break inventory model which of subsequent is optimal order quantity.

Deliberate the importance of information technology planning : Deliberate the importance of information technology planning as well as control processes to protect confidential information and prevent major loss of information.

What is aggregate sales and operations planning : In an overview of major operations planning activities in a typical service organization which of subsequent activities follows aggregate sales and operations planning.

User Account

All Pages