- Tags:
- Show more
- Pages:
- 2
- Words:
- 1100
Final Exam Student’s Name Institution Final Exam Problem Definition: The U.S. Transportation Department has resorted to the regulation of peanuts in airplanes due to susceptibility to allergies (Bynum, 2010). There are many complaints of allergy gathered from individuals with allergies, medics and food companies bringing about this debate toward the ban of peanuts in airplanes. Apparently, these allergies break out when the people are flying hence; they are supposed to be banned on the planes. Most of the cases are not fatal; therefore, the debate on whether to ban these peanuts or not becomes constant. Reasons for Government Interventions: The case dictates that about 1.8M American people suffer from peanut allergies (Bynum, 2010). By banning the peanuts through government interventions, there would be fewer risks of these consumers complaining about peanut allergies. Intervention here also shows that the governments care about national unity by restricting these peanuts from the public. If at all the governments do not ban a ‘harmful' commodity, they end up placing the lives of these consumers in danger. Market Failures: There is an evident market failure in this case since the quantity demanded by consumers is not in-line with the subsequent supply. Peanut farmers and food packagers have complained about the inability of these government interventions to lead to equilibrium. Embracing negative externality leads to more allergies as it shows that the producers do not care about their consumers' well-being. The market, therefore, inevitability fails when there is a focus on negative rather than positive externality. Criteria and definitions of
Leave feedback