When Congestion Occurs on the Freeway (Because of a Shortage

question 6

Multiple Choice

When congestion occurs on the freeway (because of a shortage of freeway space) ,an economist would most likely explain this by saying that it is because

• A) the freeway has too few miles of roadway.
• B) there are too many cars.
• C) the price of driving on the freeway is below the equilibrium price.
• D) a and c

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Definitions:

CCA Class

In Canadian taxation, Capital Cost Allowance (CCA) Class refers to categories of assets that are subject to different rates of depreciation for tax purposes.

Incremental Cash Flow

The extra cash flow from operations that a company gets by starting a new project.

Tax Rate

This represents the percentage at which an individual or corporation is taxed by the government.

Straight-Line Depreciation

Straight-line depreciation is a method of allocating the cost of a tangible asset over its useful life in equal annual installments.