Highway Congestion Is an Example of the Tragedy of the Commons

question 298

Multiple Choice

Highway congestion is an example of the tragedy of the commons because

• A) consumer surplus rises when a new driver enters the road.
• B) a new driver fails to consider the external costs of his using the road.
• C) the common resource is not used.
• D) marginal benefit can never equal marginal cost for the common resource.

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Definitions:

Allowances

Amounts set aside for adjustments or reductions in the value of accounts or inventories, often for potential bad debts or depreciation.

Withheld

Refers to amounts deducted from an employee's wages or payments, often pertaining to taxes or other legal obligations, not immediately paid to the employee.

Interstate Commerce

A test that is applied to determine whether an employer must follow the rules of the Fair Labor Standards Act. If an employer communicates or does business with another business in some other state, it is usually considered to be involved in interstate commerce.

FICA

FICA refers to the Federal Insurance Contributions Act, which is a U.S. law that requires a payroll tax to fund Social Security and Medicare programs.