In 1994, Congress passed legislation exempting aircraft from product liability claims in court if they were older than 18 years and had fewer than 20 seats. The probability that such aircraft would be involved in an accident declined in the wake of the passage of the legislation. Given what you have learned in this chapter, explain why.
Answer to relevant QuestionsSuppose that a college town has a large number of firms selling a homogeneous product—pizza—and that there are two types of consumers in the town. The town’s permanent residents are fully informed about the prices ...Explain why a certain triangular area is a measure of the deadweight loss of monopoly. What information do you require in order to calculate the size of this triangle? Compare the effects of a $ 1-per-unit excise subsidy when applied to a monopoly and to a competitive industry with the same cost and demand conditions. In which case will price fall more? In which case will output increase ...Per capita income is 600 percent higher in the United States than in Mexico. No other two countries sharing a border have a wider disparity in income levels. Explain why this leads to immigration of workers from Mexico to ...Suppose that firms in an industry use two inputs, labor and capital. If the price of labor increases, then the firms will demand less labor and more capital. True, false or uncertain? Explain your answer.
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