Question 22M.3.HL.TZ0.2a.i
| Date | May 2022 | Marks available | [Maximum mark: 4] | Reference code | 22M.3.HL.TZ0.2a.i |
| Level | HL | Paper | 3 | Time zone | TZ0 |
| Command term | Explain | Question number | a.i | Adapted from | N/A |
Traffic congestion is a major problem in India. It is estimated that congestion in four major cities costs the Indian economy approximately US$22 billion annually. According to a 2019 survey, India has four of the eight most congested cities in the world. People in these cities pay higher fuel costs, inhale toxic gases, and waste up to 11 days a year stuck in traffic.
In New Delhi, India’s capital city, 45 % of workers use cars to travel to work, while 89 % of workers indicate plans to purchase a car in the next five years. However, 80 % of car users say they would change their plans if ridesharing businesses such as Uber could meet their requirements on price, timeliness and availability.
Using a diagram and the information above, explain why traffic congestion in India may be considered an example of market failure.
[4]
Candidates who label the diagram incorrectly can be awarded a maximum of [3].
The y axis may be labelled price or P and/or costs and/or benefits, and the x axis labelled quantity or Q. A title is not necessary. S and D are not required to be part of the labelling.
Negative consumption externality
The question was generally well-answered although a small minority of candidates treated traffic congestion as a production externality.
