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Question 22M.3.HL.TZ0.2a.viii

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Date May 2022 Marks available [Maximum mark: 4] Reference code 22M.3.HL.TZ0.2a.viii
Level HL Paper 3 Time zone TZ0
Command term Explain Question number a.viii Adapted from N/A
a.viii.
[Maximum mark: 4]
22M.3.HL.TZ0.2a.viii

The causes and costs of congestion

In the last 10 years, India’s road network has increased by 34 % while vehicle registrations have increased by 200 %. Additionally, India’s strong rate of economic growth has resulted in increased demand for motor vehicles.

Traffic congestion involves slower speeds and increased journey times, which impose higher costs on the economy. Congestion has a range of indirect impacts including environmental harm, inefficient use of resources and reduced quality of life.

Figure 3 shows the growth in road passenger traffic in India and China from 2000 to 2017.
It can be seen that there has been a huge increase in the use of road passenger traffic in India. It has been argued that Indian workers who implement rational consumer choice would assess the costs and benefits of using cars and, as a result, many would switch to alternative forms of transport.

Figure 3

(a.viii)

With reference to the use of cars in India, explain how one limitation of the assumptions of rational consumer choice might result in the overuse of cars in New Delhi.

[4]

Markscheme

N.B. A range of valid responses is available for this question. Candidates should be fully rewarded if they provide a well-explained answer which applies other limitations of the assumptions of rational consumer choice such as:

  • biases: availability, anchoring, social conformity, inertia
  • bounded self-control
  • any valid response.
Examiners report

The majority of candidates identified a lack of information as a limitation of the assumptions of rational consumer choice. It was then possible to apply this to the context provided in a number of ways, such as:

  • lack of available information is a limitation (of the assumptions of rational consumer choice). If drivers are unaware of the benefits of using other means of transport (which could result in gaining greater utility) then they will choose to drive, resulting in over-use.
  • lack of available information might refer to the information about negative externalities of driving - whether it be the congestion or other negative costs of the use of cars - and therefore drivers might not take the opportunity to use alternative means of transport which would be better for them and for society, also (possibly) resulting in greater personal utility.
  • biases such as the desire to conform/peer pressure (using a car as a status symbol) might lead drivers to use cars when in fact alternative methods of transport might yield greater utility.
  • bounded self-control – drivers might be aware that a rational decision would be to switch from using cars to alternative means of transport but they do not have the self-discipline to abandon their use of cars.

It is argued that the theory of demand is based on rational consumer decisions and that a rational consumer will in fact ignore the externalities, resulting in over-use of cars. This approach was fully rewarded.

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