Explain the external costs that arise from using a cell phone while driving and why the market for cell-phone service creates a deadweight loss.
Talking on a hands-free cell phone while driving might seem safe, but people who used hands-free cell phones in simulation trials exhibited slower reaction times and took longer to hit the brakes than drivers who weren’t otherwise distracted. Data from real-life driving tests show that cell-phone use rivals drowsy driving as a major cause of accidents.