Listen to the news article below.
Answer the following:
- Why does James Surowiecki believe the current price of
gasoline is too low and results in inefficiency?
- which kind of inefficiency?
- does he believe that there are spillover costs or spillover benefits and what are they?
- show the inefficient quantity on a graph
- What are the effects of the higher tax that James
Surowiecki is proposing?
- what effect does it have on efficiency?
- show the effect of the higher tax on your graph
- use your graph to discuss how the tax makes the market for gasoline more efficient
Arguing the Upside of High Gas Prices Morning Edition, September 22, 2005 One writer believes gas prices actually should be
high. Steve Inskeep talks with James Surowiecki, a
financial columnist for The New Yorker who says a 50-cent
gas tax would make drivers pay for the real cost of cars
on the road and make business cater to the
fuel-conscious. To listen click on the link below and then click on
http://www.npr.org/templates/story/story.php?storyId=4858826