What are the basic ways of dealing with externalities? Briefly describe the pros and cons of each.
There is no toll for using a freeway during rush hour. Explain why economists think this is unwise (i.e. use economics to explain why we should have a toll on the LIE during rush hour). Explain why (for a public road) Coase theorem is unlikely to apply (i.e. resolve the issue of the increase in crowding/congestion brought about by additional use of the freeway).