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An argument can be made that the Government could improve consumer welfare by requiring companies to provide accurate information to consumers about their products. We already see this intervention by the government in the labeling requirements on food, warnings on packages of cigarettes, and prohibition of false advertising but do warning labels really deter consumers from eating or engaging in “unhealthy” behaviors? Should companies like McDonald’s be “required” to label coffee with the caution that the content is hot?
- Should the Government increase, decrease or remain the same in its level of intervention when it comes to mandating that companies provide product information to consumers? What happened to “caveat emptor” (buyer beware)?
- Can you think of examples where the government does not intervene enough when it comes to consumer safety and product information? Examples where too much intervention is the case? Explain your answers.
- How can consumers become better educated about the products they are considering for purchase? To what extent do you personally go to acquire the best information available?