• April 21st, 2016


Paper, Order, or Assignment Requirements

Question 1: Reasons for government intervention
The imposition of congestion charges on motorists is a form of government intervention into the issue of traffic congestion on busy public roads. With reference to economic theory covered in this course, why do you think the government needs to intervene in this issue?
(8 marks)
Question 2: Public policy solutions
(a) Perform an economic analysis of congestion charges as a public policy instrument. (In your answer, consider: what sort of public policy instrument is a congestion charge? How does it work in economic terms?)
(6 marks)
(b) What other public policy instruments can the government employ to combat traffic congestion on busy public roads, and how do these differ from congestion charges?
(6 marks)
Question 3: Efficiency of public policy solutions
(a) Based on your analysis in Question 2(a) above, how should congestion charges be set in order for congestion problems to be corrected in a way that maximises the overall welfare of society? Explain.
(4 marks)
(b) Do you think that the government will be successful in employing congestion charges to correct congestion problems and restore efficiency? Why or why not?
(6 marks)
Question 4: Private solutions
How can each of us as private individuals contribute to the reduction of traffic congestion in the absence of government intervention? Are such private solutions likely to be effective?
(5 marks)

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