Discuss three possible solutions for reducing traffic congestion on freeways. Be sure to explain what effect each would have on the supply and/or demand for freeway space
1 ) Impose a toll to drive on the freeway. This would push up the price of driving on the freeway and the quantity demanded of freeway space would decline while the quantity supplied would remain constant (as a result of the vertical supply curve for freeway space). If the toll were placed at the point where the market is in equilibrium at the most congested times of day, the congestion problem would be eliminated. 2 ) Build more freeway space. This solution would shift the supply curve for freeway space (a vertical supply curve) to the right but would not shift the demand curve. 3 ) Promote carpools or give incentives for carpooling. If more drivers were ridesharing, the demand curve for freeway space would shift to the left while the supply curve would remain in its original position. 4 ) Improve public transportation. As with the use of carpools, an increase in public transportation ridership would shift the demand curve for freeway space to the left while the supply curve would remain in its original position.
You might also like to view...
In the long run,
a. higher consumption spending means a larger capital stock and a higher standard of living b. higher investment spending means higher interest rates c. higher investment spending means a larger capital stock and a higher standard of living d. higher interest rates means higher consumption spending e. higher government spending means a larger capital stock and a higher standard of living
The Hawaiian island of Lana'i is privately owned by Castle & Cooke and for generations most of its land was used to grow pineapples. Now, many of the pineapple fields have been replaced by tourist accommodations, including a pair of world-class hotels and a top rated golf course. What would an economist say about this change in land-use patterns?
A. Economic rent has allocated the island's resources to their highest valued use: tourism. B. Agriculture is still the land's highest-valued and most efficient use, but tourism earns more profits for Castle & Cooke. C. To find the land's economic rent, add the price per acre that land on Lana'i would be worth if used to grow pineapples to the value per acre when used for a golf course. D. While growing pineapples used the island's land more efficiently, tourism provides utility to the largest number of people.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, Point E necessarily represents
A. only motorcycles being produced. B. overallocation of resources. C. an impossible production point. D. technological advancement.
Which major factor of economic theory do behavioral economists question?
A. Supply and demand B. Monopolies C. Interest rates always increasing with term length D. Objective probabilities in assessing expectation E. Rationality