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:

Market Equilibrium

A market scenario in which the equilibrium between demand and supply results in stable prices.

Incentive

Anything that offers rewards to people to change their behavior.

Quantity Demanded

The aggregate quantity of a product or service that buyers are prepared and capable of buying at a certain price.

Quantity Supplied

The quantity of a product that sellers are prepared and capable of offering for sale at a certain price during a defined timeframe.