Explain why a freeway isn't always considered to be a pure public ...

[nramada]

Explain why a freeway isn't always considered to be a pure public good.
 
  What will be an ideal response?

Question 2

Refer to Figure 4-4. The figure above represents the market for iced tea. Assume that this is a competitive market. At an output of 10,000 units
 
  A) the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently high.
  B) the marginal benefit of iced tea is greater than the marginal cost; therefore, output is inefficiently low.
  C) the marginal cost of iced tea is greater than the marginal benefit; therefore, output is inefficiently low.
  D) producers should lower the price to 1 in order to sell the quantity demanded of 10,000.

[britb2u]

Answer to Question 1

For the greater part of the day a freeway could be considered to be a pure public good since one person's enjoyment of the good doesn't interfere with anyone else's. However, that breaks down when we consider rush hour traffic in the morning and early evening. Commuters traveling during these times do indeed interfere with everyone else's enjoyment of the freeway but adding (albeit incrementally small amounts) to the commute time of everyone else traveling at that time.

Answer to Question 2

B

[nramada]

Thanks for the timely response, appreciate it

[Alyson.hiatt@yahoo.com]

TYSM