Question

An article in the Wall Street Journal on the parking problems at​ Tesla's Fremont, California factory notes​ that: "Tesla has tried to encourage alternatives to​ driving, such as​ biking, public transportation and the shuttle buses provided from around the Bay Area​ ..."

If Tesla auctioned off the right to park in its​ lot, would the firm need to provide other encouragement for employees to use alternative means of​ transportation? Briefly explain.

A.

​Yes, it would remain necessary to provide alternatives to driving because the price of parking spaces would rise.

B.

​No, it would not be necessary because the spaces would be allocated to those most willing to pay for them.

C.

​No, encouraging the use of transportation alternatives would not be necessary due to a shortage of spaces.

D.

​Yes, encouraging driving alternatives would still be necessary because the supply of spaces would be unchanged.

Is the most economically efficient allocation of parking spaces in​ Tesla's lot likely to result from auctioning off the right to park or from keeping parking free while encouraging employees to use alternative means of getting to​ work? Briefly explain.

A.

Keeping parking​ free, because no one has to pay anything for parking.

B.

Keeping parking​ free, because those with less income may get a parking space.

C.

Auctioning off the right to​ park, because the people who get the parking spaces would be determined randomly.

D.

Auctioning off the right to​ park, because those who benefit the most from the parking spaces would receive them.

Given your answer​ above, why​ hasn't Tesla considered charging employees for parking in its​ lot?

A.

Employees may consider this method to be unfair.

B.

Tesla workers are not rational.

C.

Managers may believe that they should not be charged for parking.

D.

Charging employees for parking is too​ time-consuming.

Answer 1

For the first question -

Statement -

An article in the Wall Street Journal on the parking problems at​ Tesla's Fremont, California factory notes​ that: "Tesla has tried to encourage alternatives to​ driving, such as​ biking, public transportation and the shuttle buses provided from around the Bay Area​ ..."

If Tesla auctioned off the right to park in its​ lot, would the firm need to provide other encouragement for employees to use alternative means of​ transportation? Briefly explain.

Answer - D. Yes, encouraging driving alternatives would still be necessary because the supply of spaces would be unchanged.

Explanation - Even when the parking spots are auctioned, the problem of limited parking space would persist. Yes, some people would get their claim to parking spots based on the auction but others would be left without any space to park. Hence, the need to still encourage for driving alternatives would persist as well.