Why Should the Management of a Tunnel Charge a Toll

question 3

Multiple Choice

Why should the management of a tunnel charge a toll to users?

• A) Users may differ in their marginal benefit.
• B) Users may differ in their marginal cost.
• C) To force users to internalize the marginal cost of congestion.
• D) To equalize the marginal benefit across users.

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Definitions:

LIFO

Stands for Last In, First Out, an inventory valuation method where the most recently produced or purchased items are recorded as sold first.

Periodic Inventory System

An inventory accounting system where inventory counts are performed and updated at specific intervals to determine cost of goods sold and ending inventory levels.

Ending Inventory

The value of goods available for sale at the end of an accounting period. It is the beginning inventory plus purchases minus the cost of goods sold.

FIFO

"First In, First Out," a method used in inventory management and accounting where the oldest inventory items are sold or used first.