Problem
More than 3 million lead-tainted toys from China were recalled worldwide June through August of 2007. At the time, it was predicted that U.S. consumers would face price increases of up to 10% to pay for the industry's increased third-party testing by manufacturers and sellers (Anne D'Innocenzio, "Consumers Could Face Higher Toy Prices," San Francisco Chronicle, September 14, 2007). Suppose instead that toys could be reliably labeled "tested" or "untested," and untested toys sold at a discount. Would consumers buy cheaper, untested goods or would they fear a moral hazard problem? Discuss.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.