Microeconomics 13th Edition by Russell Sobel, David Macpherson, Richard Stroup, James Gwartney

Exercise 7

Congress and government agencies often make laws to help protect the safety of consumers. New cars, for example, are required to have many safety features before they can be sold in the United States. These rules do indeed provide added safety for buyers, although they also add to the cost of making and price of buying the new vehicles. What secondary effects can you see happening as the result of mandating that automobiles have airbags? What incentives do you see changing for drivers as the result of making cars safer? Do you think the millions of dollars spent by consumers on air bags each year could be better spent elsewhere to save even more lives?