Identify the social costs of increased automobile ownership, and then describe two options for restoring the balance between private and public goods. Give specific examples

What will be an ideal response?

For cars, some of the social costs include traffic congestion, gasoline shortages, and air pollution. One option for restoring the balance between private and public goods is to make producers bear the full social costs of their operations. The government could require automobile manufacturers to build cars with more efficient engines and better pollution control systems. Automakers would then raise their prices to cover extra costs. A second option is to make consumers pay the social costs. For example, many cities around the world are starting to charge "congestion tolls" in an effort to reduce traffic congestion; drivers entering high-traffic areas are required to pay a fee. Similarly, the U.S. government has recently proposed a bill that would create rush-hour fees in congested urban areas across the country. If the costs of driving increase enough, the government hopes, consumers will travel at nonpeak times or find alternative transportation modes.