A city is considering how to manage its public transportation system. An economist observes that in addition to the direct benefit to riders, a widely used bus system also reduces traffic congestion and air pollution for all residents. In the current market, the bus fare is determined by the intersection of supply and the demand from riders. How does this bus fare most likely compare to the marginal social benefit of a single bus ride?
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CORE Econ
Ch.10 Market successes and failures: The societal effects of private decisions - The Economy 2.0 Microeconomics @ CORE Econ
The Economy 2.0 Microeconomics @ CORE Econ
Analysis in Bloom's Taxonomy
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A city is considering how to manage its public transportation system. An economist observes that in addition to the direct benefit to riders, a widely used bus system also reduces traffic congestion and air pollution for all residents. In the current market, the bus fare is determined by the intersection of supply and the demand from riders. How does this bus fare most likely compare to the marginal social benefit of a single bus ride?
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