The example about London's congestion problem illustrates which of the following economic ways of thinking?
A) Thinking at the Margin
B) Use of Assumptions to Simplify
C) Isolate Variables-Ceteris Paribus
D) all of the above

Question

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The example about London's congestion problem illustrates all three economic ways of thinking.

A) Thinking at the Margin: The example discusses the concept of congestion pricing, which is a marginal cost applied to driving in congested areas. Drivers who choose to drive in congested areas are making decisions at the margin, weighing the marginal cost of driving (the congestion charge) against the marginal benefit of getting to their destination quickly.

B) Use of Assumptions to Simplify: The example assumes that drivers respond to incentives and will change their behavior in response to a congestion charge. This is a simplifying assumption that helps economists analyze how the policy might work in practice.

C) Isolate Variables-Ceteris Paribus: The example isolates the effects of a congestion charge by assuming that other factors affecting driving behavior (such as weather, road conditions, or gas prices) remain constant. This is a ceteris paribus assumption that helps economists isolate the effects of the policy on congestion levels.

The Example About London's Congestion Problem Illustrates Which of the Following