When a government attempts to protect consumer safety, health and welfare and wo

Question

When a government attempts to protect consumer safety, health and welfare and workplace safety, it often uses a variety of approaches. For example, it can provide information, it can set regulatory standards which are enhanced by enforcement through inspections and possible fines, it can set regulatory standards enhanced by enforcement via the court system, or it can set liability standards and let individual litigants determine outcomes. Other options and combinations are available. For the following situations, indicate whether it represents an example of market failure. Then, describe the problem(s) in each case and propose a regulatory and/or legal framework that you believe would address the problem(s) efficiently. (A proposal can be “no regulation is necessary”.) Explain why you believe your proposal to be economically efficient. a. Workplace (i.e., kitchen) conditions in restaurants. b. Purchase and consumption of alcoholic beverages.. c. On-line gambling.

Explanation / Answer

a. Workplace (i.e., kitchen) conditions in restaurants: in the existing scenario, there do exists numerous law and regulations which take care of occupational hazards in workplaces. Especially the kitchen of a restaurant can get extremely hot when employees use the ovens, grills and stoves. The restaurant owner needs to provide a cool area with air conditioning or fans for employees to take their breaks. Training should be conducted to address any kind of medical emergency and also training should be given where the tell tale signs of dehydration and heat exhaustion are discussed, and ways to administer first aid to an ailing co-worker is taught.

To check whether such provisions and systems are put in place the inspector may conduct adhoc inspections to find whether there is any violation of the provisions as stated in the regulations. If violated, the restaurant may be fined and directions may be given to correct the conditions under stipulated guidelines.

Since most of the restaurants have regulations which cater to employee safety, health and welfare, there is no proposal to change the regulation or adopt a new one.

b. Purchase and consumption of alcoholic beverages.

Currently there are regulations which prescribe amongst many other things, the minimum age to drink or minimum age of a person who can purchase liquor from shops or locations where they can indulge in drinking etc. However there are many loopholes in this for example a boy 18 years old goes to purchase liquor from a shop, how will the shopkeeper identify that he is less than 18 years and not eligible to purchase liquor. System should be put in place where this age check may be done. Many a times the shopkeepers are not vigilant and sensitive enough, towards the misuse and after effect of consumption of liquor. Such sensitization drive should be periodically conducted. Provisions in regulations to the effect of our discussion in this para should be included.

c. On-line gambling.

In the United states there are specific law & Regulations for online gambling and each one tries to prevent or make hard for people to transfer money to and from gambling sites. However, this does not prove to be a deterrent and people try to engage in online gambling through some or the other source. Regulations have been a failure so far. To dissuade people from engaging into gambling, strict enforcement with penalties should be imposed which might act as a deterrent, since people enjoy free money but not parting away with it as a punishment.

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