Question: 3. a) Why can the accident externality be considered a government failure? (3) b) Explain the text's analysis of the effects of a congestion tax

a) Why can the accident externality be considered a government failure? (3)

b) Explain the text's analysis of the effects of a congestion tax on those who pay the tax and continue to use the highway. What would change if the tax revenue raised by the congestion tax was not "returned" to the initial commuters by reducing their other taxes? Can this explain why those who are supposed beneficiaries of congestion taxes so commonly oppose them?

reading links to the books: https://www.amazon.com/Urban-Economics-8th-Arthur-OSullivan/dp/0071086684

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