The Automobile and the Environment :: Business and Management Studies

The Automobile and the Environmenta) disconfirming externalities be impacts on out side of meatrs that aredisadvantageous to them. The externalities occur where the actions offirms or individuals harbor an effect on the people other thanthemselves. In the case of contradict externalities the external effectsare constitute on other people. They are also known as external damages.There may be external apostrophizes from both production and consumption. Ifthese are added to the private approachs we get the total social costs. Anexample of negative externalities would be the side effects ofproduction processes e.g. the pollution (noise, dust, vibration)endured by people living contiguous to a quarry.b) From looking at the data we can see that since 1974 the cost of frequent transport has increased quite rapidly relative to the miserly rateof 100 compared to the cost of motoring which has steadily decreased.Initially it was the true(a) cost of motoring which increased but by 19 75it had started to decline and go along to do so until the late1970s. It past increased quickly for a short period until 1982 outcomeup just above the footstall rate and remaining there until 1985. It thensteadily declined up until 1994. exoteric transport on the other handhas been increasing since 1974. The real cost of rail travel hasincreased steadily with a few dips ending up in 1994 at just over 165.The real cost of bus travel has also increased over the 20 division periodbut more gradually with a sharp trick out in 1988 followed by a fall in1990 but then a final increase ending up in 1994 at just over 140.c) The fact that the cost of oil/petrol condemnable over the 20year period of1974-1994 and the cost of public transport go is why there is such abig gap between them. The cost increases and decreases could havehappened for a number of reasons. The cost of petrol decreases whensupply is great than demand or when demand is low. Transport costscould have rose if the d emand is too great for it or to increaserevenue for councils/government. If public transport needs to bemodernised/repaired than also putting the prices up enables extrarevenue to spend on these things.d) The classic way to chastise for externalities is to tax thosewho create negative externalities. This is sometimes known as makingthe polluter pay. The government needs to assess the cost to asociety of a particular externality. It then sets tax rates on thoseexternalities equal to the encourage of the externality. This increasescosts to customers by shifting the supply curve to the left.