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There were 275,924,442 vehicles registered in the United States in 2020. (a) Give an example of an externality associated with an additional driver on a
There were 275,924,442 vehicles registered in the United States in 2020. (a) Give an example of an externality associated with an additional driver on a congested road. (b) How can tolls help alleviate this externality? When will a toll booth be Pareto efficient? (c) How should the toll be set? (d) Some cities (e.g., Beijing during the 2008 Olympics) restrict the total quantity of cars, by banning cars with even (or odd) last digits of their license plates on alternating days. Why might this be preferable to the optimal toll in (c)
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