Microeconomics: Theory and Applications with Calculus, 4e

16 Uncertainty

In America anyone can be president. That’s one of the risks you take.

—Adlai Stevenson

CHALLENGE BP and Limited Liability

On April 20, 2010, a massive explosion occurred on the Transocean Deepwater Horizon oil rig, which was leased by the oil company BP. The explosion killed 11 workers and seriously injured 17 others. In addition, many of the 90,000 workers who participated in the cleanup suffered significant health problems from exposure to various toxins. Safeguards in the well to automatically cap the oil in case of an accident did not work as expected. Consequently, a massive spill of roughly 200 million gallons of oil polluted the Gulf of Mexico before the well was finally capped. This catastrophic oil spill inflicted gigantic ...