The first case study focuses on a Cost Benefit Analysis (CBA) of a change in the regulations of the organic egg market. In particular, the law increased the stringency of animal welfare requirements...

Please use the case provided to answer the questions.


The first case study focuses on a Cost Benefit Analysis (CBA) of a change in the regulations of the organic egg market. In particular, the law increased the stringency of animal welfare requirements for eggs to be called “organic” rather than just “cage-free.” In your discussion, we will walk through the framing of this CBA and some of the key assumptions. I will also have you calculate the consumer surplus change for one scenario.  1. Begin by defining some of the potential benefits and costs from this policy, and to whom these accrue. You might think of benefits or costs that the authors do not include, and that is okay! 2. Analysts predicted that WITHOUT REGULATION, quantity of eggs offered in cage-free market would grow from 460.4 million dozen to 1005.2 million dozen between 2016 and 2022. Simultaneously, the price increase in this market predicted to grow from $3.16 to 3.78. The quantity of eggs in the organic market would grow from 325.8 million dozen to 667.6 million dozen over the same period, with a price increase from $3.93 to $4.50. What role do these predictions play in the CBA? 3. Write out the calculation for the change in consumer surplus in the organic egg market when the price elasticity of demand is assumed to be -1 (the third line in the table). 4. Explain why Boardman makes such a big to-do about the CBA authors’ treatment of the supply of cage-free eggs.