There is a road between the suburbs and downtown. The road is congested at rush hour, so each additional driver slows all of the other drivers down. In this question, we will calculate the cost of this negative externality. For simplicity, ignore all of the costs of using the road other than the cost of time. Assume that people value their time at $6 per hour (that is, $0.10 per minute). If 121 people use the road at rush hour, the trip takes 37 minutes. If one additional person enters the road, everyone would have to slow down and the trip would take one more minute for everyone. What is the monetary value of the time-loss that the additional driver imposes on the other drivers already on the road? (Round your response to 1 decimal place, and do not include a dollar sign.)

There is a road between the suburbs and downtown. The road is congested at rush hour, so each additional driver slows all of the other drivers down. In this question, we will calculate the cost of this negative externality. For simplicity, ignore all of the costs of using the road other than the cost of time. Assume that people value their time at $6 per hour (that is, $0.10 per minute). If 121 people use the road at rush hour, the trip takes 37 minutes. If one additional person enters the road, everyone would have to slow down and the trip would take one more minute for everyone. What is the monetary value of the time-loss that the additional driver imposes on the other drivers already on the road? (Round your response to 1 decimal place, and do not include a dollar sign.)

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter27: Markets And Government

Section: Chapter Questions

Problem 7E

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