How traffic congestion becomes a tragedy of the commons and how it can be resolved.

Question

Want to see the full answer?

Answer 1

Question

Chapter 16, Problem 3.1P

To determine

How traffic congestion becomes a tragedy of the commons and how it can be resolved.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

PRICE OF CARS 1. Efficiency in the presence of externalities Cars impose many external costs on society: carbon dioxide emissions that contribute to air pollution, congestion on roadways, and so on. Therefore, the market equilibrium quantity of cars is not equal to the socially efficient quantity. The following graph shows the demand for cars (their marginal private benefit), the supply of cars (the marginal private cost of producing them), and the marginal social cost of cars, including both the marginal private cost and external costs. Use the black point (plus symbol) to indicate the market equilibrium quantity. Next, use the purple point (diamond symbol) to indicate the socially efficient quantity. Demand (MPB, MSB) QUANTITY OF CARS As a result, the market output is MSC + Market Output Socially Efficient Output Supply (MPC) the socially efficient output. (?) Which of the following policies could help the government achieve the socially efficient outcome? Check all that apply. ☐…

A policymaker argues that if the roads were privately owned, then the externality of traffic congestion would be fully internalized and solved by the market. Discuss this by first explaining the externality problem that leads to congestion, and then explain whether the private market would deliver the efficient level of roads.

Which of the following policies could help the government achieve the efficient outcome? Check all that apply. Introduce emission taxes Offer a subsidy to consumers equal to the vertical distance between the marginal private benefit curve and the marginal social benefit curve Implement tradable pollution permits Offer a subsidy equal to the price at the efficient outcome Offer a subsidy to producers equal to the vertical distance between the marginal private benefit curve and marginal social benefit curve