If workers' compensation premiums reflected the full social cost of the injuries sustained by each employer's workers, then this would lead to:
A)fewer workplace injuries than is socially optimal.
B)more workplace injuries than is socially optimal.
C)the socially optimal number of workplace injuries.
D)the elimination of workplace injuries.

Question

Quizplus · Accepted Answer

If workers' compensation premiums reflected the full social cost of injuries sustained by each employer's workers, it would create an incentive for employers to implement proper safety measures and reduce workplace injuries to the socially optimal level. Thus, the socially optimal number of workplace injuries would be achieved.

If Workers' Compensation Premiums Reflected the Full Social Cost of the Injuries