Which of the Following Policies Is MOST Likely to Reduce

question 109

Multiple Choice

Which of the following policies is MOST likely to reduce traffic congestion in a large metropolitan area because people usually exploit opportunities to make themselves better off?

• A)a limited number of free early-bird parking passes given only to those who arrive prior to 6 A.M.
• B)a toll road that requires each car to pay a fee to enter the city center
• C)an increase in the price of subway and bus fare to and from the city
• D)asking citizens to carpool

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Definitions:

Variable Cost

Costs that vary directly with the level of production or sales, such as materials and labor.

Rate of Return

The profit or deficit incurred on an investment during a certain period, shown as a percentage of the original investment amount.

Target Cost

The maximum amount that can be spent on a product to ensure a desired profit margin is achieved.

Market Dictated Price

The price of a good or service as determined by the supply and demand dynamics in the open market.