Question

A bridge becomes congested after 100 vehicles per hour use it on any day. To achieve efficiency, a toll: a. that charges all users of the bridge, no matter how many vehicles use it per hour, should be imposed. b. on additional users in excess of 100 per hour should be imposed. c. on all users should be imposed, if more than 100 users per hour are expected. d. is not required. 34. Taxes: a. are voluntary payments to governments. b. are unlikely to affect market supply and demand. c. never affect efficiency in the allocation of

Answer 1

The answer is C.

Explanation:

Tolls should be levied on all cars during the hours when there is high congestion in order to reduce congestion on the brigde. This is called as Dynamic Tolls.

In the above question, toll should be levied on all cars during those hours when more than 100 cars are expected to pass through the bridge. This will demotivate people to travel during peak hours as they will have to pay a price for it and they will try to shift their journey during less busy hours.