In the kinked demand curve model, the demand curve is ________ for price increases and ________ for price decreases
A) unit elastic; relatively elastic
B) relatively inelastic; relatively elastic
C) relatively elastic; relatively inelastic
D) perfectly elastic; perfectly inelastic
C
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You are an economist for the City Subway Commission. Presently, the price of a subway ride is 80¢, and 200,000 seats are filled weekly. The price elasticity of demand for subway rides is -0.40, and the income elasticity of demand is -0.60.
(i) The Commission wants to ensure that the subway has enough excess capacity to handle any extra demand that might occur during an economic decline. If a recession lowered area incomes by 5%, how many additional seats per week would the subway need? (ii) The Commission has just approved a subway price increase of 10¢ per ride. The Commission wants to know if it can use the opportunity to retire two aging subway cars that each provide 8,000 seats weekly. When the price hike goes into effect, can neither, one, or both cars be retired?
If crime rates in the United States fall, can incumbent lawmakers rightfully claim credit? Why or why not?
What will be an ideal response?
The demand curve of a commodity slopes downward because of:
a. the insatiable nature of human wants. b. the presence of double coincidence of wants. c. the law of demand. d. the scarcity of goods and services in an economy. e. the law of diminishing marginal utility.
Explain the difference between a progressive income tax, a proportional income tax and a regressive income tax. Under which type of system is the federal income tax?