Budgets, Income Elasticity of Demand and Tragedy of Commons
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1. Suppose the U.S. government decides trim the budget a wee bit by eliminating a couple of departments (and their corresponding bodies of regulations). Gone are: The Food & Drug Administration (FDA) and the Occupational Safety & Health Administration (OSHA).
Briefly describe consumers' and workers' behavior after these bureaus (and their corresponding regulations) are eliminated.
This is a very general question and there is no one absolutely correct answer. I will be looking for sound economic reasoning above
2. Strictly in economic terms, are children normal or inferior goods? Construct your argument in terms of the income elasticity of demand. Be sure to include brief definitions of normal and inferior goods.
3. Describe the Tragedy of the Commons, provide a contemporary example, and offer a potential solution.
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1. Suppose the U.S. government decides trim the budget a wee bit by eliminating a couple of departments (and their corresponding bodies of regulations). Gone are: The Food & Drug Administration (FDA) and the Occupational Safety & Health Administration (OSHA).
Briefly describe consumers' and workers' behavior after these bureaus (and their corresponding regulations) are eliminated.
This is a very general question and there is no one absolutely correct answers. I will be looking for sound economic reasoning above
If the FDA is removed the net effect on consumers will be that the cost of products covered by the FDA will go up. How? The customer will have to take precautions about the products consumed. In some cases, she may get food and medicine tested privately to ascertain the safety of those goods, and later the consumer will limit her consumption to those products that she has tested or has information about. The overall effect will be that the choice of goods for the consumer will become less since the consumer ...
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