Exam questions (Jan 2005)

1. It is estimated that the costs of traffic congestion now exceed £20 billion per annum, yet the government is still reluctant to introduce a national system of road user charging.
(a) Explain how the costs of traffic congestion might be estimated. [10]
Discuss how effective the introduction of a national system of road user charging might be in reducing the problem of traffic congestion. [15]

2. (a) Explain the relationships between the component parts within the structure of the UK railway industry.
Discuss the ways in which economists might assess the efficiency of the UK railway industry

3. There has been much argument in recent years on whether aviation fuel should be taxed in order to reduce pollution caused by air transport.
(a) Explain how the negative externalities associated with air transport cause a misallocation of resources. [10]

(b) Discuss the extent to which a tax on aviation fuel might correct the misallocation of resources associated with air transport.

Answers/guidelines here

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