What would be the effect of a 75 percent tax on lawsuit punitive awards that was proposed by then California governor Arnold Schwarzenegger in 2004 on:

• The number of punitive awards. Demonstrate your answer using supply and demand curves. (You will post your graph as jpg. in your discussion post).
• The number of pretrial settlements.

Airlines and hotels have many frequent-flyer and frequent-visitor programs in which individuals who fly the airline or stay at the hotel receive bonuses that are the equivalent to discounts.

• Give two reasons why these companies have such programs rather than simply offering lower prices.
• Can you give other examples of such programs?
• What is a likely reason why firms whose employees receive these benefits do not require their employees to give benefits to the firm?