One group of people uses New York City subways only during rush hour to travel to and from work. Another group uses them only in midday for leisure activity. If New York City wants to increase transit fares with the smallest possible reduction in revenue, for which group should it increase the fare?
a. The rush-hour group because its demand for subway service is more elastic than that of the midday group.
b. The rush-hour group because its demand for subway service is less elastic than that of the midday group.
c. The midday group because its demand for subway service is more elastic than that of the rush-hour group.
d. The midday group because its demand for subway service is less elastic than that of the rush-hour group.
e. It doesn't matter because both groups have the same elasticity of demand.
B
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Which economist(s) argued that high tax rates produce less tax revenues and limit the expansion of real GDP and employment?
a. Robert Lucas and Thomas Sargent b. A. W. Phillips c. Robert Barro d. Paul Samuelson e. Arthur LafferF
For a perfectly competitive firm, marginal revenue is identical to marginal cost at every quantity
Indicate whether the statement is true or false
The GDP deflator is
What will be an ideal response?
Two factors are affecting the domestic auto industry: (1) an increase in cheap Korean imports (2) an increase in the cost of materials. What can we say about equilibrium price and quantity of domestic autos?
A. Equilibrium price will fall. B. Equilibrium quantity will fall. C. Equilibrium price will rise. D. The answer cannot be determined from the information given above.