In many large American cities it is common to witness private motorists pulling up to municipal bus stations and allowing perfect strangers to ride into downtown with them in order to take advantage of the high occupancy vehicle lanes that require
two or more drivers. Using the concept of elasticity of demand and total revenue explain why public transit authorities might be concerned with this practice.
Public transit authorities may be concerned about this practice because it provides a very good substitute for their services and may make municipal bus service more price elastic and could have a deleterious impact on the revenue generated by the public transit system.
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A demand schedule
A) shows that demand is on schedule. B) is a graph showing a relationship between the quantity demanded and the price of a good. C) shows the quantity demanded at one price. D) is a list of the quantities demanded at each different price when all other influences on buying plans remain the same. E) shows how the demand changes when the supply changes.
In her book on the American work week, economist Juliet Schorr argues that Americans work too much. Her argument may be interpreted as concluding that this behavior
A. increases GDP but decreases well-being. B. increases GDP and increases well-being. C. decreases GDP and decreases well-being. D. decreases GDP but increases well-being.
Suppose a developing country is falling further behind the developed countries that it neighbors. As an economic consultant, you are called to look at its policies to recommend changes. If you saw all of the following on your visit, which of them could be an explanation for the slow growth in the economy?
A. You see that the roads, bridges, and ports are in great shape thanks to the work of the World Bank. B. You see that the central bank does not pay attention to what the elected officials want. C. You see that new companies must bribe local officials to move their exports to the docks. D. You see that literacy rates rival those of its developed neighbors.
Suppose a tax on sellers has been imposed in the graph shown. What is the total tax paid per unit of the good?
A. $10 B. $15 C. $16 D. $6