The “do nothing” or laissez faire approach to product safety seems especially unsuited to consumer markets...

The “do nothing” or laissez faire approach to product safety seems especially unsuited to consumer markets because perfect information and rational agency conditions are especially ill satisfied in consumer markets? Explain.
Program The “do nothing” or laissez faire approach to product safety seems especially unsuited to consumer markets because perfect information and rational agency conditions are especially ill satisfied in consumer markets? Explain.
Program

Solutions

Expert Solution

Accidents happening from consumer products take a big toll .In the US , every year,more than 20 million accidental injuries take place and death from injuries account for 100, 000 .Such deaths mostly occur due to injuries from consumer products.The consumers also have to bear additional costs as a result of misleading selling practices.The laissez fairie approach tries to provide product safety features that are demanded by consumers for the product they want to pay. The laissez faire approach assumes that the market for the consumers is perfectly competitive. However this assumption is incorrect.In the consumer markets, conditions of perfect information and rational agency are not present.Consumers do not get proper information because of misleading marketing practices.Choices which are not at all rational , are made by the consumers at times . This is due to the fact ,that irrational fears , irrational trusts grips the consumers as well as misleading market informartion .Again consumer markets have Oligopoly market structure and so there is lack of proper distribution and openness in the as expected by the laissez faire approach.The responsibility of consumer protection,lies in three views ie the contract view, the due care view and the social cost view and these views are not present in the laissez faire approach.

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

8. A “laissez-faire” approach to the macroeconomy before the Great Depression influences our government to: ...

8. A “laissez-faire” approach to the macroeconomy before the Great Depression influences our government to: a) See business downturns as a “serious malady” in a “healthy” system, and therefore take only short-term deficit spending measures to help recovery. b) See business downturns as a “serious malady” to an otherwise “healthy system,” and therefore wait for recovery to occur naturally. c) See business downturns as a “serious malady” to an otherwise “healthy system,” and therefore work to redesign...

Explain Smith’s argument for a “laissez-faire” approach to the role of government in a market/capitalist economy,...

Explain Smith’s argument for a “laissez-faire” approach to the role of government in a market/capitalist economy, paying particular attention to Smith’s explanations of how the market/capitalist economy is (a) self-regulating, (b) stable, and (c) self-propelling. Type, please do no pictures

Adam Smith’s Invisible Hand concept favors a Laissez-Faire Capitalism approach. Describe the approach and its limitations....

Adam Smith’s Invisible Hand concept favors a Laissez-Faire Capitalism approach. Describe the approach and its limitations. What is the role of government that supports this approach? Compare and contrast to the Republican & Democratic positions on government participation. Give examples

Try as we may, whether economies have markets that are laissez faire, loosely or tightly regulated,...

Try as we may, whether economies have markets that are laissez faire, loosely or tightly regulated, or whether the government is the major decision-maker, markets do fail. That is, they fail to register the appropriate/proper/efficient prices and quantities in the marketplace. Costs and/or benefits may, in some markets, spill over onto people outside of the market transactions – thus, the externality. Some are positive (my neighbor who lives to the left of me, has a flower garden that improves my...

Try as we may, whether economies have markets that are laissez-faire, loosely or tightly regulated, or...

Try as we may, whether economies have markets that are laissez-faire, loosely or tightly regulated, or whether the government is the primary decision-maker, markets do fail. They fail to register the appropriate/proper/efficient prices and quantities in the marketplace. Costs or benefits may, in some markets, spill over onto people outside of the market transactions – thus, the externality. Some are positive (my neighbor who lives to the left of me has a flower garden that improves my quality of life,...

With which group is a laissez-faire attitude toward most markets closely associated? Group of answer choices...

With which group is a laissez-faire attitude toward most markets closely associated? Group of answer choices Keynesians supply-side economists monetarists classical economists

Once the Consumer Product Safety Commission (CPSC) prohibits the sale of a particular product in the...

Once the Consumer Product Safety Commission (CPSC) prohibits the sale of a particular product in the United States, a manufacturer can no longer sell the product to U.S. wholesalers or retailers. However, the product can be sold in other countries that have not prohibited its sale. The same is true of other countries' sales to the United States. For example, Great Britain outlawed the sale of the prescription sleeping pill, Halcion, but sales of the drug continue in the U.S....

1. Draw two separate graphs that show the “do nothing” or classical approach and the active...

1. Draw two separate graphs that show the “do nothing” or classical approach and the active monetary policy or Keynesian approach in the case of an aggregate demand shock in the AS-AD framework. Briefly explain the steps involved in the Fed’s monetary response.

Please explain what is statistical approach to “Built-in Quality” in consumer product. The idea has to...

Please explain what is statistical approach to “Built-in Quality” in consumer product. The idea has to include process capability, process control, DOE, partial DOE and Taguchi Method. It is important to provide some real application examples.

The Market Approach to consumer protection states that if consumers do not place a high value...

The Market Approach to consumer protection states that if consumers do not place a high value on safety (or are unwilling to pay for it), then it is wrong to force them to pay for higher levels of safety through regulation. a. True b. False 6. The Due Care theory is based on the idea that consumers and sellers do not meet as equals and that consumers are vulnerable to being harmed by manufacturers, who have a knowledge and an expertise...

Subjects