Using a Toll to Reduce Traffic When Congestion Is Greatest

question 284

Multiple Choice

Using a toll to reduce traffic when congestion is greatest is an example of a

• A)regulation solution.
• B)command-and-control policy.
• C)corrective tax.
• D)Coase theorem solution.

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Definitions:

Consumption Bundle

A combination of goods and services that a consumer chooses to consume given their budget constraints.

Utility Function

A mathematical representation of how consumers rank different bundles of goods according to their level of satisfaction or utility.

Consumption

The process by which goods and services are used up by consumers.

Indifference Curves

A graphical representation showing combinations of goods or services among which a consumer is indifferent, depicting equal levels of utility.