1.) Suppose that it is possible to instantly determine which driver is at fault for a particular accident. The responsible driver must pay for either a vaporize or a two truck to clear up the accident. Describe a simple public policy that would provide the incentive for drivers to freely choose the socially efficient method to clear up the accident.

2.) Consider a city with two neighborhoods with different crime rates. The bulgalry rate in the low-income neighborhood is 15, compared to 5 in the high-income 362 Part 4 Education and Crime in Cities neighborhood. the two neighborhoods have the same victime costs per bulgalry (P1,500). Suppose this outcome is socially efficient.

a. A higher crime rate in the low -income neighborhood is socially efficient if the low income neighborhood

b. One possible reason for the difference noted in (a) is that low-income household