The following data show the relationship between the number of drivers who leave for work at 8:00 a.m. ,their average commute times,and their marginal benefit associated with the commute times.
-Refer to the data above.It is likely that a toll would reduce average commute times more effectively than a Coase theorem-styled,negotiated solution,because
A) this is not an externality problem.
B) the government needs additional revenue.
C) the external cost is not well-defined.
D) no one will negotiate when they leave for work.
E) private negotiations among 500 drivers are impractical.

Question

The following data show the relationship between the number of drivers who leave for work at 8:00 a.m. ,their average commute times,and their marginal benefit associated with the commute times. 
-Refer to the data above.It is likely that a toll would reduce average commute times more effectively than a Coase theorem-styled,negotiated solution,because
A) this is not an externality problem. 
B) the government needs additional revenue. 
C) the external cost is not well-defined. 
D) no one will negotiate when they leave for work. 
E) private negotiations among 500 drivers are impractical.

Quizplus · Accepted Answer

Private negotiations among 500 drivers are impractical due to the large number of individuals involved, making it difficult to reach a consensus or enforce agreements.

The Following Data Show the Relationship Between the Number of Drivers