Budgets, Income Elasticity of Demand and Tragedy of Commons
1. Suppose the U.S. government decides trim the budget a wee bit by eliminating a couple of departments (and their corresponding bodies of regulations). Gone are: The Food & Drug Administration (FDA) and the Occupational Safety & Health Administration (OSHA).
Briefly describe consumers’ and workers’ behavior after these bureaus (and their corresponding regulations) are eliminated.
This is a very general question and there is no one absolutely correct answer. I will be looking for sound economic reasoning above
2. Strictly in economic terms, are children normal or inferior goods? Construct your argument in terms of the income elasticity of demand. Be sure to include brief definitions of normal and inferior goods.
3. Describe the Tragedy of the Commons, provide a contemporary example, and offer a potential solution.