One way to allocate road space in a congested city would be to charge drivers to use the roads.
One reason why this policy is likely to result in a more efficien allocation of resources is because
1 )
incentives to build new roads would be higher.
2 )
only higher income drivers would choose to use the roads.
road use would be rationed to drivers who benefit from it the most.
4 )
the government would raise a large amount of revenue from drivers.
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