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N.J. Highway Tolls Are Starting to Go Permanently Cashless

EconEye Admin

More and more drivers on toll roads use EZ-Pass. Now New Jersey wants to use cashless tolling on all its toll roads. Collectors signed a new contract in 2020, which some considered their last agreement.—govtech.com

Answer the following questions to check your understanding of the story.

1) How does the increase in EZ-Pass drivers change the value of marginal product of toll collectors?

The increase in EZ-Pass drivers ______________.

The increase in EZ-Pass drivers means that fewer drivers are paying toll collectors. How does this influence the marginal product of a toll collector? How does this change in marginal product change the value of marginal product of a toll collector? Does the supply of toll collectors change?

As the number of EZ-Pass drivers increases, each toll collector serves fewer drivers. The marginal product of the toll collector decreases, which decreases his value of marginal product.

2) As the price of cashless tolling technology falls, what is the outcome in the market for toll collectors?

Cashless tolling technology and toll collectors are ______________ so the falling price of cashless tolling technology ______________.

Cashless tolling technology and toll collectors are two ways of collecting tolls. Are they substitutes or complements? When the price of cashless tolling technology falls, does the demand for or supply of toll collectors change?

Cashless tolling technology and toll collectors are substitutes—they both collect tolls. The falling price of cashless tolling technology decreases the demand for toll collectors.

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