Introduction to Economic Analysis Essay
Introduction to Economic Analysis Essay Essay / Exercise Topics Essay Topic : Road Pricing ” Charging motorist for each mile they travel is inevitable if traffic gridlock is to be avoided, the RAC Foundation charity has suggested (fifth of July 2010). In addition, a study published by the Department of Transport recommends that motorists pay for each journey with the price set according to time, distance and location. ” a) Explain why traffic congestion is a classic example of the problem of externalities. (10 marks) b) Consider the ways in which private motorists will respond to road charges and comment on the private motorists’ price elasticity of demand for road use. (1Omarks) c) Using supply and demand diagrams analysis and explain the impact of road Pricing on: (i) The market for Petrol. (ii)The market for bus journeys. (30marks) d) Outline the advantages and disadvantages of charging motorists depending on when they travel and which roads they use. (40 marks
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