The Following Data Show the Relationship Between the Number of Drivers

question 32

Multiple Choice

The following data show the relationship between the number of drivers who leave for work at 8:00 am,their average commute times,and their marginal benefit associated with the commute times. $$\begin{array} { c c c } \begin{array} { c } \text { Number of drivers } \\ \underline {\text { that leave at 8:00am }}\end{array} & \begin{array} { c } \text { Average commute } \\ \underline {\text { time to downtown }}\end{array} & \begin{array} { c } \text { Marginal } \\ \underline {\text { Benefit }}\end{array} \\ 100 & 30 \text { minutes } & \$ 10 \\200 & 65 \text { minutes } & \$ 8 \\300 & 110 \text { minutes } & \$ 4 \\400 & 170 \text { minutes } & \$ 3 \\500 & 260 \text { minutes } & \$ 1\end{array}$$
Refer to the information given above.Suppose a toll is imposed in the following way: leaving between 8 a.m.and 9 a.m.costs $5 per driver,after 9 a.m. ,the toll is zero.The toll __________ because __________.

• A) reduces efficiency;citizens are paying for the highway through taxes and through the toll
• B) improves efficiency;government now has more tax revenue
• C) reduces efficiency;drivers don't change their behavior because $5 is less than the benefit of driving
• D) improves efficiency;the highway is no longer treated as having a price of zero

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Definitions:

Canadian Company

A business entity that is registered, operates, or was founded in Canada.

Real Exchange Rate

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Measures implemented by governments to control the amount of trade across their borders including tariffs, quotas, and bans.

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The net balance resulting from domestic residents buying foreign assets and foreigners buying domestic assets.