Characteristics of a common resource, Taxation

Suppose there are 40 commuters in Apple Valley, Minnesota who commute to downtown Minneapolis. They have two options for getting downtown: they can take the light rail or they can drive their own car. It takes 25 minutes to get downtown on the light rail, while the time it takes to drive depends on how many other commuters are on the road. Suppose the commute time is (5 + n) minutes where n is the number of commuters on the road (the only people who use the highway are the residents of Apple Valley). Assume workers care only about their commuting time, and the cost of driving is the same as the cost of light rail.

The highway during rush hour is a common resource. What are the two characteristics of a common resource?


Assume the commuters make their decisions about whether to drive or take the light rail independently. How many commuters do you expect to see on the road? What is the total commuting time for all 40 commuters combined in this equilibrium?

If only 10 commuters take the highway the total commuting time for all 40 commuters combined is 900 minutes. Why is this outcome most likely unsustainable if drivers make their decisions independently?

Posted Date: 3/25/2013 6:07:55 AM | Location : United States







Related Discussions:- Characteristics of a common resource, Assignment Help, Ask Question on Characteristics of a common resource, Get Answer, Expert's Help, Characteristics of a common resource Discussions

Write discussion on Characteristics of a common resource
Your posts are moderated
Related Questions
Donald, a 40-year-old married taxpayer, has a salary of $55,000 and interest income of $6,000. What is the maximum amount Donald can contribute to a Roth IRA?

Explain the Negative List of Services applicable w.e.f 1,july,2012 ?

do you offer tutoring services for graduate accounting students?

#queTonya had the following items for last year: Salary $40,000 Short-term capital gain 12,000 Nonbusiness bad debt (25,000) Long-term capital gain 8,000 For the current year, Tony

How efficient is the business at turning revenues into profit?

Hi Dear, could you do the online exam with me !! Thank you

Q. Explain the effects of taxation on the equilibrium of a firm? Suppose a tax is imposed on the producers of a commodity, the tax is on each unit for they produce. Naturally,

King Corporation, an accrual method taxpayer, reports the following results for 2014: Regular taxable income before regular tax NOL deduction $800,000 Minus: Regular tax NOL deduc


Kline Company, an accrual basis calendar year corporation, reported $560,000 net income before tax on its financial statements prepared in accordance with GAAP for 2011. Kline's re