Unit 1: Economics and Globalization

Lesson 1c: Making Choices - The Production Possibilities Curve (PPC) and Benefit-Cost Analysis

Something Interesting - Why are we studying this?

 

Why would airbags in cars cause more accidents (see the link below)? After studying this lesson you should be able to use Benefit Cost Analysis (MB=MC) to answer this question.

Drivers with airbags may take more risks

 

A similar question for skiers is why did the invention of avalanche airbags cause more people to become caught in avalanches (see below)? After studying this lesson you should be able to use Benefit Cost Analysis (MB=MC) to answer this question.

In a March 2013 blog post written by Utah Avalanche Center Director Bruce Tremper . . . Tremper says airbags are providing a false sense of security, leading more skiers into high-consequence terrain, and thus decreasing the effectiveness of said airbag.

"Each gizmo we buy to increase our safety usually cause us to increase our level of risk at the same time. For instance, when we added seat belts and airbags to cars, yes fatalities decreased, but it also allowed us to drive faster, farther, crazier and talk on our mobile phones at the same time. So safety measures usually work but not nearly as well as we would hope because people just increase their risk (and “utility”) at the same time. In avalanche airbag case, we will also get more powder, more fun, and more risk in the bargain . . . . people will increase their exposure to risk because of the perception of increased safety, which will cancel out some, but not all, of the effectiveness of avalanche airbag"

What are avalanche airbags?
https://www.youtube.com/watch?v=h7QFRXc0R8M

 

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Lesson 1c