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Transit privatization is highly controversial, with proponents claiming great potential benefits and detractors pointing to cases where privatization has been very problematic. One critical consideration in this argument is the concept of merit good. The rationale behind this concept is that governments should guarantee basic service in public transportation to deprived customer groups despite the fact that it is economically irrational.
Today, the question among most observers is not whether public transportation should be subsidized, but what the optimal level of subsidy should be. All public transportation systems need some degree of subsidy to run, but some are more privatized than others. The U.S. air transportation system is an example where “privatization” has worked well: very little government subsidy goes to the airlines, but tickets are both inexpensive and readily available.
However, in markets where there is no economic incentive for airlines to fly, the government has instituted a program called Essential Air Service. Unlike airline privatization as a whole, this program, a holdover from the days of bloated airline regulation, has been a disastrous example of overspending and inefficiency. Across Alaska and many other rural states like Maine and North Dakota, airports and airlines are subsidized so that unprofitable routes are flown in the name of “merit good.” However, in most of these places, airports are neither required nor important to deprived customer groups; they are simply an economic boon to important special interest groups that support congressmen and senators. While there is a place for subsidy and even direct government involvement beyond the required minimum – when true merit good issues are concerned – most transportation systems are better today after privatization than they were in the days of total government control. All you need to do is look at the “Essential Air Service” program to understand the wastefulness and inefficiency that existed in the 60’s and 70’s when most public transportation systems were under full government control.
1. The author would most likely agree with government subsidies beyond the required minimum for which of the following companies: A. a steel manufacturing plant that cannot remain profitable without infrastructure improvement and higher steel prices. B. a bus company that services remote towns in which many deprived people live and that cannot be profitable without subsidies. C. a train company that services many affluent summer communities and will stop service without appropriate subsidies. D. a bio-medical company that will make an important vaccines for rare diseases but needs access to start-up money. E. an airline that services the major U.S. markets but is failing to compete with its rivals, some of which operate in the Essential Air Service program.
2. All of the following can be properly inferred from the passage EXCEPT: A. A majority of public transportation systems are better under privatization than they were under government control. B. Some public transportation systems in the U.S. can be run without subsidies. C. Most observers agree that there should be some degree of government subsidy in public transportation. D. Most public transportation systems were under government control in the 60’s and 70’s. E. Many Essential Air Service flights are on unprofitable routes in rural states.
3. The author’s highlighted statement at the end of the passage assumes which of the following: A. The Essential Air Service program is not drastically different than the government airline programs in the 60’s and 70’s. B. Government subsidy programs have not improved dramatically since the 60’s and 70’s. C. Public transportation systems are not better today than they were in the 60’s and 70’s. D. The Essential Air Service program is not going to change dramatically and remove some of the most inefficient routes. E. The need for the Essential Air Service program has not increased dramatically over the past few years.
参考答案:BBA
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发表于 2021-10-25 19:43:12
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