Follow the instructions provided below to answer the questions.

Questions

1. You learned about special damages, general damages, and punitive damages in this chapter. What are "liquidated damages" and "treble damages"? Click on the "Legal Encyclopedia" link, and then "Browse." Key terms are listed alphabetically.

2. Who is the primary regulator of insurance?the federal government or the states? This issue was decided in 1945 with the passage of the McCarran-Ferguson Act. To see the decision, click on "Get the Law," then "U.S. Code," then "Title 15?Commerce and Trade," and finally, "Chapter 20?Regulation of Insurance." Section 1011 specifies who is the primary regulator of insurance.

3a. What are the three types of product defects that can result in legal liability for the manufacturer or supplier of products? Type "Products Liability" in the search box. The Wex article, "Products Liability Law: An Overview," will answer this question.

3b. Products liability is considered a strict liability situation. Explain how this doctrine is applied in products liability cases. (use the same article you used for the previous question)

4. What are the three broad classifications of torts? What are the two sources of tort law? Type "tort" in the search box, then click on "Tort" in the search results. The article you will use is titled "Tort Law: An Overview."

5. What is the purpose of workers compensation laws? Are the laws governing the compensation of injured private sector workers promulgated at the state level or at the federal level? To what extent and in what areas is the federal government involved in workers compensation? Type "workers compensation" in the search box. Use the Wex article titled "Workers' Compensation: An Overview" to answer these questions.

6. Insurance contracts are contracts of "good faith." Many lawsuits against insurers allege "bad faith." What are the definitions of these terms? To see the definitions, click on the "Legal Encyclopedia" link. Key terms are listed alphabetically.

7. Alternative dispute resolution was discussed as a tort reform option in this chapter. What are "mediation" and "arbitration"? What option is attempted before mediation and arbitration? To answer these questions, click on "Legal Encyclopedia." Find "Alternative Dispute Resolution" in the list of terms. Use the link that does not include "(ADR)" after the term.

2. The notion that, under competition, decisions motivated by self-interest provide what consumers want at low prices, is known as the "invisible hand" O government regulation of markets ( the "visible hand" of corporate management capitalism7. Ceteris paribus, which market structure would have the most control over product price? oligopoly monopoly monopolistic competition perfect competitionD Question 14 1 p Consider a natural monopoly with a large fixed cost and a small and constant marginal cost per unit produced that does not receive any subsidies. Which of the following statements is true? 1. The government should intervene to make sure that there are at least two firms operating in the market which will reduce the prices and costs of the product. II. Government regulation involving marginal cost pricing eliminates the deadweight loss and the monopoly remains profitable. Ill. Government regulation involving average cost pricing always maximizes total surplus. None of the other answers is correct only II is true O only I is true O only Ill is true only II and Ill are true D Question 15 1 ptsThe two most common forms of market regulation are price ceilings and price floors. 1. A price celling is when the government promulgates a regulation or law that prohibits charging more than a specified price. 2. A price floor is when the government promulgates a regulation or law that prohibits charging less than a specified price. The most common mistake made when analyzing the effects of price ceilings and price floors is to ignore that it is not in people's self interest to obey the rule or law. In fact, it is profitable and the individual can make himself better off by ignoring the price ceiling or price floor and transacting above or below the regulated price. Every price ceiling and price floor initiates a cycle of regulation, resistance, more regulation, better resistance etc. the end result of which is the effect of the price ceiling or price floor is radically different than what the government intended when it initially promulgated the regulation or law. When a price ceiling or price floor is effectively enforced it creates an allocation problem. At the regulated price, there are either more people trying to buy the good at the regulated price than are offered for sale (price ceiling) or there are more people willing to sell at the regulated price than there are buyers (price floor). Any complete analysis of a price ceiling or floor must analyze how the allocation problem is solved, i.e. who ends up being able to buy or sell the good at the regulated price. When the price ceiling or floor is effectively enforced some form of non-price rationing must take place. The government usually tries through additional regulation or laws to determine who ends up with the good because choosing who ends up with the good redistributes wealth making some people better off and others worse off. The cycle of regulation/resistance, however, means that the people who end up with the good are frequently not who the government intended.1. The language of price controls Suppose that, in a competitive market without government regulations, the equilibrium price of gasoline is $3.00 per gallon. Complete the following table by indicating whether each of the statements is an example of a price ceiling or a price floor and whether it is binding or nonbinding. Statement Price Control Binding or Not Due to new regulations, gas stations that would like to pay better wages in order to hire more workers are prohibited from doing so. The government has instituted a legal minimum price of $2.70 per gallon for gasoline. The government prohibits gas stations from selling gasoline for more than $3.40 per gallon