A country is facing a problem wind is blowing leaves and branches onto the main highway,
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Question:
A country is facing a problem — wind is blowing leaves and branches onto the main highway, creating traffic congestion. Some private citizens have worked to clear the road, but the number of cleared miles is well below the socially efficient level. Note that when the highway is clear it is large enough that it is never crowded.
a. What type of good is “a mile of cleared highway.” Explain.
b. Suppose that the country takes its queue from the U.S. and enacts an “adopt the
highway” program, in which, in exchange for maintaining a mile of the highway, a group of citizens will get to have their name posted on a sign next to the high- way. Appealing to the concepts learned in class, explain why this program may result in an increase in the number of miles cleared.
Related Book For
International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr
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