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1) Two possible solutions to the problem of congested roads are gasoline taxes and tolls. Which...

1) Two possible solutions to the problem of congested roads are gasoline taxes and tolls. Which of these two alternatives is preferable and why?

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Answer #1

It can be mentioned that tolls can actually be a better alternative and this is because of the fact that gasoline prices can increase due to the taxes but when marginal analysis is concerned during the peak time people still prefer gasoline and use their own vehicles but when tools are there at a single marginal point, the cost will be higher and therefore the elasticity will be high and less vehicles can result.

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