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

Marginal tax bracket, Maskot Industries wishes to determine whether it woul...

Maskot Industries wishes to determine whether it would be advisable to replace an existing, fully depreciated machine with a new piece of equipment. The new machine will cost $300,

How long, How long should receipts be kept?

How long should receipts be kept?

Compute the service and interest cost for 2012, Sachs Brands' defined benef...

Sachs Brands' defined benefit pension plan specifies annual retirement benefits equal to: 1.2% × current service years × final year's salary, payable at the end of each year. Angel

Tax care, #queCongress recently enacted an non refundable credit based on t...

#queCongress recently enacted an non refundable credit based on the cost of the qualifying alcohol and drug abuse counseling programs provided by and corporate employer to its empl

Moving expenses deductable?, Just moved out of state. My husband works 3 pa...

Just moved out of state. My husband works 3 part time jobs instead of one full time job. Can we deduct our moving expenses?

Digressive tax, what is the dis advantage of digressive tax?

what is the dis advantage of digressive 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