Question
A common policy across states are mandatory motorcycle helmet and seatbelt laws i.e. you have to wear a helmet/seatbelt or you'll get a fine/lose your
A common policy across states are mandatory motorcycle helmet and seatbelt laws i.e. you have to wear a helmet/seatbelt or you'll get a fine/lose your license (my old state New Hampshire is the only state currently without either).
a.Draw me the private marginal benefit curve and private marginal cost curve for New Hampshire without any laws in place. I've labeled the axes for you in the standard price/quantity fashion we're used to. Label the equilibrium price P and the equilibrium quantity Q.
b.However, those were just the private marginal curves. On the same graph above, draw and label the social marginal cost curve. In the space below, briefly explain (i.e. a couple sentences) to me why you drew it where you did. In particular, tell me what the external costs are by offering some actual examples.
c.Again on the graph in part A., shade in the dead weight loss that New Hampshire has by not recognizing the external costs to not wearing seatbelts (you do not have to calculate it). Pretend I know nothing about economics (well hopefully pretend) and intuitively explain to me what this area means/shows.
d.There's a professor at the University of Hartford who argues that there is a small positive consequence to more/more deadly car crashes and that's through increased organ donation. Again on the graph in part a., illustrate what he's talking about by finding the socially optimal equilibrium. Label price at your final point, PEfficient and quantity QEfficient. How does this affect the dead weight loss problem you showed New Hampshire suffered from before?
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