AtravellerinAutopiaisfaced withthefollowingcharacteristics:

Averagetraveltime,att: att=10+0.02q,whereqiscartripspertimeperiod,

Inversedemandfunction,MB: MB=250-0.04q.

Forsimplicity,assumethattheconversionfromtraveltimeunitstomoneyinvolvesa(weightedaverage)valueoftimethatis$1pertimeperiod.Thereisnoneedtousecalculusatallinthisquestion.Afterall,weknowthatforastraightline,themarginaltraveltime,mtt,hasaslopethathastwice theslopeoftheaveragetraveltime,att.

a.

Whatisthetrafficequilibriumlevelofcartrips,qo?

Whatisthe(Pareto)optimallevelofcartrips, q*?

Whatisthecongestiontoll *?

b.

Whatisthedollaramountof thetimesavings?Whatisthedollaramountof thetimesavingsexpressedasafractionofthemotorist's totaltollpayment?Adiagramwouldhelpanswerpartsa)tob).

c.

Therearetwoequivalentwaysofmeasuringthechangeintotaltraveltimefromthetrafficequilibriumlevel,qo,tothe(Pareto)optimallevel,q*.Showthesetwowaysdiagrammaticallyandnumerically.

d.

Use your results above to demonstrate the economic intuition ofthe twoapproachestomeasuringthewelfareimpactofroadpricing.

e.

Whywouldmotoristsbeagainstroadpricing?Whatarethepolicyimplicationsthatcouldbederivedfromtheabovesetup?

f.

Howwouldairpollutionandclimatechangebetackedontotheaboveset-up?

Howdoestheappearanceof Covid-19(duetothecoronavirus)affectthesetup?