read a SHORT article and answer three questions.

link for this article:


a) Explain in principle how you would determine whether the companies are meeting their standard of care in the design of the soup packaging.

b) What additional information would you need to make a definitive determination of the appropriate standard of care

c) Supposing the consumers are unable to make an accurate assessment of the risks from the soups, would you favor a negligence rule or a strictly liability standard for claims for injury from the soup?

d) Now assume that only the firms know the risk abatement costs (their own costs and those of the other firms) while the (external) social costs of injuries are publicly known. Explain how an authority could implement a mechanism that would identify the socially optimal level of care.


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