1. (a) In most developing countries, there are long lines of taxis at the airport, and these taxis often wait two to three hours before getting a passenger. What does this tell you about the current price in the cab- service market relative to the equilibrium price? Show this graphically with demand and supply. (b) From part (a), if you were one of these taxi drivers waiting to pick up a passenger, and given that you don't like waiting for hours to get passengers (because time is money!!), what might you do?? Explain.
1. (a) In most developing countries, there are long lines of taxis at the airport, and these taxis often wait two to three hours before getting a passenger. What does this tell you about the current price in the cab- service market relative to the equilibrium price? Show this graphically with demand and supply. (b) From part (a), if you were one of these taxi drivers waiting to pick up a passenger, and given that you don't like waiting for hours to get passengers (because time is money!!), what might you do?? Explain.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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