Question content area

Part $1$

There is a road between the suburbs and downtown. The road is congested at rush hour. If

$106106$

people use the road at rush$$ hour, the trip takes

$4444$

minutes. If one additional person enters the$$ road, everyone has to slow down and the trip now takes

$4545$

minutes. People value their time at$$ $$6$ per hour$($that is$,$ $$0\mathrm{.}10$ per$$ minute$).$ For$$ simplicity, ignore all of the costs of using the road other than the cost of time.

Part $2$

The total social cost of

$106106$

people using the road at rush hour is

$$$$466\mathrm{.}4466\mathrm{.}4.$

$($Round

your response to one decimal

place$.)$

Part $3$

The marginal social cost of one additional person is

$$$$15\mathrm{.}115\mathrm{.}1.$

$($Round

your response to one decimal

place$.)$

Part $4$

The efficient toll on this one additional person$($that is$,$ the cost he imposes on other$$ drivers$)$ is

$$$$10\mathrm{.}610\mathrm{.}6.$

$($Round

your response to one decimal

place$.)$

Part $5$

Suppose at noon $50$ people are using the road. The road is not congested and the trip takes just $20$ minutes. If one additional driver enters the$$ road, no one has to slow down and the trip continues to take $20$ minutes.

The toll at noon should be

$$$$22.$

$($Round

your response to one decimal

place$.)$