Government responses - short answer
Question 1
Explain the functions that prices perform in a market economy
Question 2
Assess the case for and against using the price mechanism to relieve the problem of traffic congestion.
Question 3
Discuss the importance of the distinction between private costs and social costs for a government considering whether or not to help finance the construction of a new railway line.
Question 4
What remedies could the government take to remedy the allocative inefficiency arising from traffic congestion?