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Negative Externalities and Urban Travel

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A city can subsidize commuting via public transit by giving public funds to buses and subways. A city also subsidizes commuting by car by spending public funds to maintain roads and bridges. How are total negative externalities affected by the public funding of buses and subways? How are negative externalities affected by public funding for roads and bridges? If a city wants to engage in corrective taxation, how might it adjust public subsidies of various methods of urban travel?

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How are total negative externalities affected by the public funding of buses and subways?

Total negative externalities are affected by public funding of buses and subways by reducing the total negative externalities. As more and more people use buses, the number of cars on roads decreases and this decreases air/noise/light pollution on the roads. ...

Solution Summary

The answer to this problem explains Negative Externalities. The references related to the answer are also included.

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References:

Mikesell, J. L. (2010). Fiscal administration: Analysis and applications for the public sector (8th ed.: 2010 custom edition). Mason, OH: Cengage Learning.

Occupational Handbook 2010-11 Edition http://www.bls.gov/oco/ocos003.htm

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