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Table of Contents

  1. Topic pack - Microeconomics - introduction
  2. 1.1 Competitive Markets: Demand and Supply
  3. 1.1 Competitive Markets: Demand and Supply - notes
  4. 1.1 Competitive markets - questions
  5. 1.1 Competitive markets - simulations and activities
  6. 1.2 Elasticities
  7. 1.2 Elasticities - notes
  8. Section 1.2 Elasticities - questions
  9. Section 1.2 Elasticities - simulations and activities
  10. 1.3 Government intervention
  11. 1.3 Government Intervention - notes
  12. 1.3 Government intervention - questions
  13. 1.3 Government intervention - simulations and activities
  14. 1.4 Market failure
  15. 1.4 Market failure - notes
  16. Section 1.4 Market failure - questions
    1. Market failure - short answer
    2. Externalities - short answer
    3. Externalities & allocative efficiency - short answer
    4. Externalities - self-test questions
    5. Public goods - short answer
    6. Merit goods - short answer
    7. Demerit goods - short answer
    8. Types of goods - self-test questions
    9. Government responses - short answer
    10. Common access resources - activities
    11. Overexploitation - questions
    12. Sustainability - report
    13. Plastic bags - carrying the weight of the environment?
    14. Running cars on biofuels can be unethical
    15. Cement - the hidden polluter?
    16. African roses - a sign of change
    17. Congestion charging
    18. Putting a price on carbon
    19. Power bills to soar in 'green reforms'
    20. Beyond Kyoto
    21. Economic growth cannot continue
    22. The rush to find Jade
    23. Chopstick tax
    24. Taxing light bulbs - that's a bright idea
    25. Trading pig excrement
    26. Congestion pricing
    27. Packaging tax
    28. Airport expansion plans
  17. Section 1.4 Market failure - simulations and activities
  18. 1.5 Theory of the firm
  19. 1.5 Theory of the firm - notes (HL only)
  20. Section 1.5 Theory of the firm - questions
  21. Section 1.5 Theory of the firm - simulations and activities
  22. Print View

Congestion pricing

Urban road transportation creates several externalities, the most important of which are congestion (time delay and extra fuel consumption), accidents, pollution, and greenhouse gas emissions. Road pricing is widely promoted as a tool to reduce these externalities.

Read the article In London, a charge to drive eases up the roads and then answer the questions below. You can either read the article in the window below or you can follow the previous link to read the article in a separate window.


You may also like to read the following articles and watch the embedded video relating to congestion pricing:


Question 1

Define the terms:

  • Sustainability
  • External costs

Question 2

Explain the reasons for charging drivers for the use of roads.

Question 3

In the light of the report quoted in the article, discuss the likely success of road charging as a policy to reduce congestion on the roads.

Question 4

Evaluate two further policies that a government could use to reduce the level of traffic congestion.

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Extension activity: New York Congestion Pricing

New York congestion pricing was proposed in 2006 by New York City Mayor Michael Bloomberg's for vehicles travelling into, or within, the Manhattan central business district. The congestion pricing charge was one component of PlaNYC 2030; a policy to improve the city's future environmental sustainability, while planning for population growth.

However, the opposition to the scheme was so overwhelming, that the proposal was never put to a vote.

Using the web links and video below, write a 500 - 1000 word report:

  • explaining the nature and operations of a congestion charge
  • outlining the cases for and against congestion pricing in Manhattan
  • identifying the stakeholders involved in New York City, explaining why they support or oppose congestion charging
  • identifying and evaluating alternatives to congestion pricing as a way of reducing traffic problems in New York city

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Congestion Pricing


You may also like to read the following articles relating to New York's proposed congestion charge: