Urban Economics Homework 2 [100 points] This homework covers concepts from chapter 5 of the textbook and its accompanying lectures on trafc congestion. Please submit the homework answers either as a pdf or as a set of jpg or png pictures. 1. The table below describes traffic on a congestible freeway. Plot and label the marginal social cost {MC}, average private cost [AC]; and demand [0} curves on the provided graph paper. Trefers to the number of cars on the freeway. T MC M: 0| 5 3.00 5 3.00 5 6.50 1 5 son 5 app 5 sac. 2 5 3.00 5 3.00 5 6.30 3 5 3.00 5 3.00 5 6.20 4 5 3.00 5 3.00 5 6.10 5 5 3.00 5 3.00 5 6.00 s s 3.21:. s 11:: 5 see 2 5 3.40 5 3.20 5 5.30 B 5 3.60 5 3.30 5 5.20 9 5 3.30 5 3.40 5 5.60 to s can 5 sea s 5.54} 11 s 4.21: s 15:: s sac. 12 5 4.40 5 3.20 5 5.30 13 5 4.60 5 3.30 5 5.20 14 5 4.30 5 3.90 5 5.10 15 5 son s 4.0:: 5 son 16 5 sea s 4.1:: s 4.94:. 1? 5 5.40 5 4.20 5 4.330 13 5 5.60 5 4.30 5 4.20 19 5 5.30 5 4.40 5 4.60 an s can s 4.5:: s 4.54:. 21 s can s 4.5:: s 4.44:. 22 5 6.40 5 4.20 5 4.30 23 5 6.60 5 4.30 5 4.20 24 5 6.30 5 4.90 5 4.10 as s 2.00 5 son s can 2. What is the equilibrium level of trafc? Label it Tag on the chart. 3. What is the socially optimal level of traffic? Label it rapt on the chart. 4. At what level of traffic does congestion appear? Label it Thur on the chart. 5. What toll would reduce trafc from the equilibrium to the social optimum? $750 $7 25 $7 00 96.75 $650 $6.25 $6.00 $5.75 95 50 95.25 $5.00 $4.75 $450 $4.25 $4.00 $3.75 $3 50 $3.25 $3.no $2.75 $2 50 $2 25 $2.00 $1.75 $150 $1.25 $1.00 $0.75 05 0$ 90.25 10 11 12 21 Traffic (T)