Which of the Following Is Correct Regarding Road Tolls as a Way

question 168

Multiple Choice

Which of the following is correct regarding road tolls as a way to reduce traffic?

• A)They can vary based on the amount of traffic that is present.
• B)They reduce drivers' explicit cost of driving but increase drivers' implicit cost.
• C)Some drivers can be made better off, but some drivers will inevitably made worse off.
• D)They are the solution to the free rider problem that occurs on roads.

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Definitions:

Unearned Rent

Income received for renting out property that has not yet been earned because the rental period has not occurred.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the wear and tear, decay, or decline in value of the asset due to use and passage of time.

Accrual Basis

An accounting method that recognizes revenue when earned and expenses when incurred, regardless of when cash transactions occur.

Net Income

The total revenue of a company minus all expenses and taxes, representing the profit made during a specific period.