A divergence between private costs and social costs
1 of 11
In order for there to be a more efficient allocation of resources, what needs to happen?
Reduce supply, increases price, reduces quantity supplied and demanded
2 of 11
Negative externality result in market failure because the good/service is ?
Overproduced and underpriced
3 of 11
The price consumers pay does not take ________ into account.
External costs
4 of 11
To correct market failure with negative externalities - (on a diagram) allocative efficiency will be achieved at?
p1 and q1
5 of 11
The most comprehensive estimates of the social costs of road transport was made by?
Adam Smith Institute in 1999
6 of 11
Within this comprehensive study, it was estimated that congestion costs how much (£bn)?
18
7 of 11
However, in this comprehensive study, during congested conditions - vehicles emit more pollutants per kilometre. Estimated social cost at this times is what?
40p per km for cars, over 80p for diesel fueled HGVs
8 of 11
In 1999, the average taxation for road users was estimated at ?
5.4p per vehicle km
9 of 11
Using current government methods, the present cost of congestion is around £25bn based on?
The value of time that is lost when road users are stuck in traffic
10 of 11
Indirect tax, regulation, subsidies to encourage greater use of public transport, information provision are all polices to?
Correct negative externalities
11 of 11
Other cards in this set
Card 2
Front
In order for there to be a more efficient allocation of resources, what needs to happen?
Back
Reduce supply, increases price, reduces quantity supplied and demanded
Card 3
Front
Negative externality result in market failure because the good/service is ?
Back
Card 4
Front
The price consumers pay does not take ________ into account.
Back
Card 5
Front
To correct market failure with negative externalities - (on a diagram) allocative efficiency will be achieved at?
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