Author Question: What are the external costs and external benefits associated with cell phone usage in ... (Read 158 times)

acc299 · **on:** Jun 30, 2018

What are the external costs and external benefits associated with cell phone usage in automobiles?

Question 2

Suppose that the world price of kiwi fruit (10 per box) is below the domestic price (12 per box). A tariff of 1 per box would:
a. cause foreign producers to be better off, because the price they charge is now higher by 1 per box.
b. cause domestic producers to be worse off by 5 per box.
c. allow domestic consumers to enjoy kiwi fruit for 5 more per box than the free trade price, but still 2 less than the domestic price.
d. allow domestic consumers to enjoy kiwi fruit for 1 more per box than the free trade price, but still 1 less than the domestic price.
e. cause domestic producers to be worse off by 10 per box.

elizabethrperez · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

The external costs associated with cellular phone usage may include a higher incidence of traffic accidents. Not only are the individuals involved in the accident bearing additional costs, but so also are other insured drivers who now have to pay higher insurance rates. External benefits could include the ability to report an accident so that help can reach victims more quickly, and so that traffic reporters can advise motorists to avoid a particular area.

Answer to Question 2

d