Question

1. In deciding to drive a car in the rush hour, you think about the cost of gas and the
time of the trip.
(a) Do you slow down other people by driving?
(b) Is this an externality, given that you yourself are suffering from slow traffic?

Answer 1

A) yes we all are slowing each other during rush hour driving and this is also costly as more fule is conumed during such drive. It also create problem for people who are pedestrian and also increase chance of accident and fatality . It's also increase time of driving and harmful as most of the time it is increase cost as efficiency or time for some essential work has been reduced.

B) yes this is a negative externalities in each and every dimension bas it increase pollution level and also wastage of time for everyone who's is travelling and also harmful for sustainable growth of economy as cost of fuel also increase and also increase in cost of operations in economy due to loss of resources in the form of human (accident) and pollution (health expenditure increment) . Thus it is negative externalities in each and every sense.