Bundle: Microeconomics, 13th + Aplia, 1 Term Printed Access Card
13th Edition
ISBN: 9781337742535
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 5, Problem 8QP
To determine
Toll prices and freeway space.
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Students have asked these similar questions
Consider an urban highway that is subject to traffic congestion. The average cost of
travel per mile on that highway is (in cents):
AC= 10 + 4T,
where Tis traffic volume per hour, measured in 100s of vehicles per hour. For example,
if T = 500 cars per hour, AC = 30 cents per mile. Assume that the demand for traffic per
hour (during rush hour) is
T = 46 – P,
where P is the "price" paid by the driver.
а.
Assume that no congestion toll is imposed. Compute equilibrium T and P.
b.
Assume that it is possible to impose the efficient congestion toll. Find the toll, and
the efficient levels of T, P, and AC.
Suppose that you are in charge of a toll bridge over the Mississippi River. The demand for
bridge crossing Q is given by the following:
2P = 20 - Q
a) How many people would cross the bridge if there were no toll? (YOU MUST SHOW
YOUR WORK TO RECEIVE CREDIT)
b) The toll bridge operator is considering setting up a price of $5.00. At that price, how
many people will cross the bridge? (YOU MUST SHOW YOUR WORK TO RECEIVE
CREDIT)
c) How many people would cross the bridge if the toll is set at $10.00? (YOU MUST
SHOW YOUR WORK TO RECEIVE CREDIT)
Q1. Suppose the government is considering an increase
in the toll on a certain stretch of highway from $3 to $4.
At present, 1 million cars per week use that highway
stretch; after the toll is imposed, the number of cars per
week will change according to its price elasticity of
demand of -0.8 (this elasticity value is estimated based
on the initial-value method).
If the marginal cost of highway use is constant (i.e., the
supply curve is horizontal) and equal to $3 per car,
what is the net annual cost to society attributable to the
increase in the toll? (your answer must be rounded off
to the nearest million dollars per year, i.e., no decimal
places; there are 52 weeks in a year)
Chapter 5 Solutions
Bundle: Microeconomics, 13th + Aplia, 1 Term Printed Access Card
Ch. 5.1 - Prob. 1STCh. 5.1 - Prob. 2STCh. 5.2 - Prob. 1STCh. 5.2 - Prob. 2STCh. 5.3 - Suppose college students are given two options....Ch. 5.3 - Prob. 2STCh. 5.4 - Prob. 1STCh. 5.4 - Prob. 2STCh. 5.5 - Prob. 1STCh. 5.5 - Prob. 2ST
Ch. 5.6 - Give an example to illustrate that someone may pay...Ch. 5.6 - Prob. 2STCh. 5.7 - Prob. 1STCh. 5.7 - Prob. 2STCh. 5.8 - Prob. 1STCh. 5.8 - Prob. 2STCh. 5.9 - Prob. 1STCh. 5.9 - Prob. 2STCh. 5.10 - Prob. 1STCh. 5.10 - Prob. 2STCh. 5.11 - Prob. 1STCh. 5.11 - Prob. 2STCh. 5.12 - Prob. 1STCh. 5.12 - Prob. 2STCh. 5 - Prob. 1QPCh. 5 - Prob. 2QPCh. 5 - Prob. 3QPCh. 5 - Prob. 4QPCh. 5 - Prob. 5QPCh. 5 - Prob. 6QPCh. 5 - Prob. 7QPCh. 5 - Prob. 8QPCh. 5 - Prob. 9QPCh. 5 - Prob. 10QPCh. 5 - Prob. 11QPCh. 5 - Prob. 12QPCh. 5 - Prob. 13QPCh. 5 - Prob. 14QPCh. 5 - Prob. 15QPCh. 5 - Prob. 16QPCh. 5 - Prob. 1WNGCh. 5 - Prob. 2WNGCh. 5 - Prob. 3WNGCh. 5 - Prob. 4WNGCh. 5 - Prob. 5WNGCh. 5 - Prob. 6WNG
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