1. Consider the theater in which a Broadway play is performed. If tickets for all seats are the same price (say, $70), what economic effect might arise?
2. The price to drive on a freeway is $0 at all times of the day. This price establishes equilibrium at 3 A.M. but is too low to establish equilibrium at 5 P.M. There is a shortage of freeway space at 5 P.M.
a. Graphically show and explain how carpooling may eliminate the shortage.
b. Graphically show and explain how building more freeways may eliminate the shortage.