Which of the following statements concerning efficiency is correct?
A)If a toll road is heavily used so that traffic movement is slowed, the price per vehicle should be reduced since the road is generating more revenue.
B)Economists advocate high prices for abundant resources and low prices for scarce resources.
C)If a toll road is heavily used and traffic movement is difficult, the price per vehicle should be increased to shift some traffic to less-crowded roads.
D)None of the above is desirable in promoting efficient use of scarce road space.

Question

Quizplus · Accepted Answer

According to the concept of congestion pricing, when a toll road is heavily used and traffic movement is difficult, the price per vehicle should be increased to shift some traffic to less-crowded roads. This helps to promote efficient use of scarce road space by encouraging drivers to make more optimal decisions about when and where to drive, and reduces congestion and delays for everyone. A and B are incorrect because they do not align with the concept of efficiency in pricing. D is incorrect because increasing the price per vehicle during times of heavy usage can help to promote efficient use of scarce road space.

Which of the Following Statements Concerning Efficiency Is Correct