Characteristics of a common resource, Taxation

Assignment Help:

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?


Related Discussions:- Characteristics of a common resource

Trusts, how are trusts considered a tax minimisation vehicle?

how are trusts considered a tax minimisation vehicle?

., Alan is an employee at ABC Pty Ltd (ABC). He has negotiated the followin...

Alan is an employee at ABC Pty Ltd (ABC). He has negotiated the following remuneration package with ABC: • salary of $300,000; • Payment of Alan''s mobile phone bill ($220 per mont

Ch. 6 #62, Roberta Santos, age 41, is single and lives at 120 Sanborne Aven...

Roberta Santos, age 41, is single and lives at 120 Sanborne Avenue, Springfield, IL 60781. Her Social Security number is 123-45-6789. Roberta has been divorced from her former husb

Justify the present budget deficit, Question 1: i) What is a public goo...

Question 1: i) What is a public good? Discuss how the free rider problem might be a problem in the provision of a public good. ii) What do we mean by ‘‘market failure''? Exp

Effects of a tax on producers of corn syrup, In response to rising obesity,...

In response to rising obesity, a number of pundits have proposed taxing corn syrup, an ingredient in most soda pop. Let's consider the market for corn syrup assuming this tax take

K- vat 2003, i want some problems with solutions on karnataka value added t...

i want some problems with solutions on karnataka value added tax 2003

Income tax liability, The following information is available for Kessler Co...

The following information is available for Kessler Company after its first year of operations: Income before taxes $250,000 Federal income tax payable $104,000 Deferred income tax

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd