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.
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.
Economics Today and Tomorrow, Student Edition
1st Edition
ISBN:9780078747663
Author:McGraw-Hill
Publisher:McGraw-Hill
Chapter16: Government Spends, Collects, And Owes
Section: Chapter Questions
Problem 15AA
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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.
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