Unit 1 Micro: Revision Question on Road Tolls

I have put together a unit 1 micro markets and market failure question focusing on the economics of motorway congestion and road tolls. It is available as a pdf download if colleagues would like to take a look. I will post some suggested answers in a few days and link back to this blog.

In 2011, overall motor vehicle traffic volume in Great Britain was just 1 per cent higher than in 2010, at 306 billion vehicle miles. Cars accounted for 79 per cent of all motor vehicle traffic, light vans accounted for 14 per cent and heavy goods vehicles accounted for 7 per cent. 20 per cent of traffic was on motorways in 2011. The annual growth of vehicle traffic volume in has slowed considerably in recent years as demand for vehicle use has been affected by the recession and a rise in the real cost of vehicle fuel at the pumps. Other expenses have also led to a sharp rise in the real cost of motoring for millions of motorists.

The Department for Transport continues to forecast that traffic will continue to grow on all major arteries and that by 2025 the English road network will be 27 per cent more congested that it was in 2003. Of the roads maintained by the Highways Agency, the A14 between Rugby and Felixstowe and the A1 in the North East of England have been put forward as likely projects to be offered to the private sector as toll roads in the near future.

Exam Practice Question

Road_Tolls_Mock_Q.pdf

Video: Tolls could be used to fund more motorways (December 2012)