Suppose There Are Two Parallel Highways Between Two Cities with Approximately

question 137

Multiple Choice

Suppose there are two parallel highways between two cities with approximately equal traffic. What would you expect to happen if the state began charging tolls to drive on one of those highways?

• A)More drivers would drive on the non-toll road, making the toll road less congested.
• B)More drivers would drive on the toll road making the non-toll road less congested.
• C)Traffic would remain evenly divided between the two roads as drivers continuously sought the less-congested route.
• D)Traffic would decrease on both roads.

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Definitions:

Labor Supply Decisions

The determination by individuals regarding how much they are willing to work, influenced by wages, working conditions, and personal preferences.

Market Wage

The prevailing rate of pay for workers in a specific market, determined by the supply of and demand for labor.

Leisure

Free time available to an individual when not engaged in work or essential activities, often used for relaxation or recreational activities.

Pareto Efficient

An allocation of resources from which it is impossible to reallocate to make any one individual better off without making at least one individual worse off.