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:

Budgeted Sales

The projected amount of sales revenue a company expects to achieve in a specific period, as determined during the budgeting process.

Break Even Point

The level of production or sales at which total costs equal total revenues, resulting in no net loss or gain.

What-If Analysis

A systematic process to explore the potential outcomes of different scenarios in decision-making or problem-solving.

Financial Models

Quantitative tools typically built in spreadsheets to forecast a financial aspect of a business entity.