Suppose that the city government is considering a law that requires everyone to have at least three people per vehicle while driving during rush hour. In debating the plan, the mayor says the law will generate benefits in terms of cleaner air and less traffic congestion. The mayor acknowledges that there might also be costs involved with the law, but states that these might actually be negative because car owners will experience less wear-and-tear on their automobiles, and hence spend less money on repairs. Comment on the mayor's reasoning. How would you determine if the proposed requirement on carpooling is a good idea?

Suppose that the city government is considering a law that requires everyone to have at least three people per vehicle while driving during rush hour. In debating the plan, the mayor says the law will generate benefits in terms of cleaner air and less traffic congestion. The mayor acknowledges that there might also be costs involved with the law, but states that these might actually be negative because car owners will experience less wear-and-tear on their automobiles, and hence spend less money on repairs. Comment on the mayor's reasoning. How would you determine if the proposed requirement on carpooling is a good idea?