Traffic-jams

Introduction to Economics Assignment 5 Revising Assignment 1 Introduction In my first assignment I came up with a combination of three solutions: - an improvement of the open transportation system system and a reduction in price - a reduction in the deprivation for movements: e.g. through tele-working - the discouragement of the exitpower of cars: a waken of the car- and road-taxes Lets see if this job had either effect at all.

Public Transport The victory of this solution depends wholly on the elasticity of charter in the transport-market. If there is a high price elasticity a reduction in the prices of transport will cause the convey for this commonplace transport to rise sharply, which means that people will leave their cars and use public transport instead. If however, the elasticity of demand is between 0 and 1, or in other spoken language highly inelastic, a reduction in the price of public transportation will not influence demand and olibanum have no effect. In this case, spending extra bullion on the public transportation system would be a waste of money.

Discouraging car-possession Reviewing this argument, it seems that we derive at the same point. once again the central question is: what is the elasticity of demand for this market? If were dealing with a highly elastic market, a raise in road- and car taxes will certainly cause the summation of cars sold to go down. However, when the market for cars appears to be inelastic a raise in car- and road taxes will not extend to a big difference in car-usage.



The advantage of this taproom compared to the reduction in prices of public transportation however, is that in any market (elastic or inelastic), a reduction in prices of public transport will cost the government money, whereas the raise in car- and road taxes will generate money.

Reduction in the deficiency for movements After all a reduction in the need for movements seems the best solution to me. This solution will not be affected by the elasticitys for the other both markets, for it simply tackles the problem at its roots. It removes peoples direct motivation for stepping into their cars: the need to get to their jobs. Therefore this will be the best solution.

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