Qualification > Commerce
ALL ECONOMICS DISCUSSION, PAPERS HELP HERE!!
elemis:
@aangel Increased taxes would increase revenue to the GOVERNMENT. This is considered a private benefit. This is becasue the Gov., which is in effect the business in this scenario, is gaining money that will ONLY benefit ITSELF.
High taxes on cars will RAISE the PRIVATE COSTS of car owners. HOWEVER, if the costs of drviing a car RISE wouldnt you consider riding a bus instead ? It would be cheaper.
Thus, more people may choose to ride a bus or use their car less of the time. Hence, car pollution will fall and external benefits will RISE.
That is, you and me will benefit from the reduced car pollution.
elemis:
--- Quote from: aangel42 on June 10, 2010, 06:21:21 pm ---No but the question is asking what is likely to happen to the external benefits if people CONTINUE to drive cars.
So what I'm trying to say is, external benefits rise because more money is raised.
At the same time external benefits FALL, because more pollution is taking place, and the charge was created in the first place to prevent pollution.
(I got the private costs part)
--- End quote ---
Sorry, I misread it. EXTERNAL BENEFITS to those who continue to drive will RISE due to lower TRAFFIC on the roads.
Freaked12:
--- Quote from: Arsenal<3 on June 10, 2010, 06:25:46 pm ---
how do external benefits fall.
They are rising because of reduced pollution due to less cars being driven on roads and less traffic sorry didnt read the question
You could argue that more buses will be driven which will increae pollution but that is neither here or there
--- End quote ---
Freaked12:
private costs will rise for the people who continue to drive cars as they have to pay tax
sorry i didnt read the question properly
elemis:
Private Costs in this case are the costs the CAR OWNERS have to pay as tax to the gov. However, this tax is a PRIVATE BENEFIT to the gov.
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