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Examine the different solutions to the problem of road congestion.

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Introduction

Examine the different solutions to the problem of road congestion. Road congestion has become a major issue that countries have encountered in the last decades. Many drivers expect congestion on long journeys and even short journeys to go to work. Congestion started in the late 1950's due to the fact that real incomes and living standards improved. The advantage and privilege of having a car gave people the freedom to travel wherever and whenever they wanted. In the 1960's the car was a very good example of an income elastic good. Which means that as income increases, the sales of cars grew also at a fast rate. ...read more.

Middle

On the other hand the supply of roads has not been sufficient to meet the demand. This is the fundamental problem which leads to road congestion. Road congestion causes many problems to a society and an economy as a whole. If a person is in their car unable to move due to a traffic jam, potentially they are not working and therefore the overall productivity of the economy decreases. Apart from the more obvious reasons, there are many externalities that arise from road congestion. An externality is a cost or benefit external to an exchange. Externalities effect a third party. These externalities are not registered with the cost of production and/or consumption of a good. ...read more.

Conclusion

The greenhouse effect has heated the earths temperature and changed the climate. We are experiencing unusual climate that damages agriculture as well as homes and buildings. The diagram on the next page shows us how externalities increase the cost/price/benefit of a good. MSB (marginal social benefit) represents the demand curve. When making a car journey, the motorist only considers the marginal private cost (MPC). This is the cost which is directed only at the motorist, how ever this does not include costs imposed upon society such as noise and pollution. On his diagram I have added a MEC (Marginal environmental costs) which is the price of the externalities. Notice that this line has a positive gradient because as more of that good is produced the more the environment will be damaged Thomas Wingate Road Congestion 11/02/03 1 ...read more.

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