Government mandates that new cars

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Q1. Something went wrong when you completed the integration on the questions. For example on question one, the Q* should be .8047 or ln5/2. Then, the Willingness to pay = 4, and the Consumer surplus is 4-ln5. Producer surplus is zero. Try putting your Q* for the value I have and see if your answer then matches the solution.

Q2. Peterson hoofer and miller showed the air bag use has led to increases in car crashes. Despite this finding, the government mandates that new cars have air bags, rather than taxing their use. Is this policy a contradiction?

Reference no: EM136683

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