QUESTION 1 – BILATERAL PRECAUTION Consider the following setting of bilateral precaution. Bicyclists who ride at night can reduce the risk of getting…

QUESTION 1 – BILATERAL PRECAUTIONConsider the following setting of bilateral precaution. Bicyclists who ride at night can reduce the risk of getting hit by a car by wearing reflective vests. Drivers can reduce the risk of hitting a bicyclist by installing HID (High Intensity Discharge) headlights, which are brighter than normal headlights. Imagine there’s only one driver and one bicyclist, and the likelihood of an accident is as follows:(I attached the likelihood of an accident )The damage done by an accident is $1,000, and compensation is perfect. Reflective vests cost $15, and HID bulbs cost $30. There is no insurance – drivers bear their own liability costs.(a) What is the efficient level of precaution by both sides? (No calculus needed, just compute the total social cost-expected cost of accidents plus precaution-under the four possible combinations.)(b) what levels of precaution by both parties will a rule of no liability lead to ?(c)What levels of precaution will a strict liability rule lead to?(d)What about a rule of strict liability with a defense of contributory negligence? (g)Who will bear the residual risk of accidents (pays the cost of those accidents that still occur) under simple negligence? what about under strict liability with a defence of contributory negligence?(h) what can you say about the levels of driver and bicyclist activity under these two rules?