1. As a transit planner for the city of Miami,you must predict how many people ride theMiami Metrorail and how much money isgenerated from train fares. According to arecent study, the short-run elasticity ofdemand for Metrorail is 0.62 and the long-run elasticity is 1.59. The current ridership is50,000 people per day. Suppose the citycommission decides to increase fares by10%.Predict the changes in train ridership over aone-month period and a five-year period.ANS:b. Over the one-month period, will totalrevenue increase or decrease? What willhappen in the five-year period?ANS

Answer: Given, Elasticity in the short run = 0.62 Elasticity in the long run = 1.59 Current…

Answered: 1. As a transit planner for the city of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose the price elasticity of supply for a good is 2.0. This means ... Group of answer choices The supply of this good is elastic. Inputs used to produce this good are probably plentiful and/or cheap. The supply of this good is elastic. Inputs used to produce this good are probably rare and/or expensive. The supply of this good is inelastic. Inputs used to produce this good are probably plentiful and/or cheap. No answer text provided. The supply of this good is inelastic. Inputs used to produce this good are probably rare and/or expensive.
a) Suppose the price of flour increases from $0.60 to $1.10 a pound and the quantity demanded decreases from 100 pounds to 60 pounds. Using the midpoint method, what is the price elasticity of demand for flour? Is the demand for flour elastic or inelastic? b) A 15 percent increase in income brings about a 25 percent decrease in the demand for a good. What is the income elasticity of demand and is the good a normal good or an inferior good?
Scenario: When the price of haircuts increases by 15%, the number of haircuts demanded by consumers decreased by 25% A-what is the elasticity of demand for haircuts (write the full equation)
Danny "Dollar" dela Cruz is a neighborhood's 9-year-old entrepreneur. His most recent venture is selling homemade brownies that he bakes himself. At a price of $1.75 each, he sells 250. At a price of $1.25 each, he sells 300. Instructions: Use the midpoint method and round your answer to two decimal places. Do not include a negative sign (-). a. What is the elasticity of demand? b. Is demand elastic or inelastic over this price range? O Inelastic O Elastic c. If demand had the same elasticity for a price decline from $1.25 to $0.75 as it does for the decline from $1.75 to $1.25, would cutting the price from $1.25 to $0.75 increase or decrease Danny's total revenue? O Increase O Decrease
The table below provides elasticity estimates, use them to answer the questions that follow. Type of Elasticity Estimate Price elasticity of demand for uber rides -1.20 Price elasticity of demand for taxis -0.60 Cross-price elasticity of demand for uber and taxis 0.50 Income elasticity of demand for uber rides 0.95 Price elasticity of supply for taxis 0.40 Suppose there was a 15% decline in the quantity of ubers, what would be the effect on price? a.+9 % b. +25% 0c-9% Od.+12.5%
The subway fare in your town has just been increased from 50 cents to $1.00 per ride. As a result, the transit authority notes a decline in ridership of 60 percent. What is the price elasticity of demand for subway rides?
Suppose that consumers experience a 5 percent increase in income and purchase walking shoes increase by 6 percent. What is the income elasticity for walking shoes? (Give your answer to one decimal place.)
A recent report by the Centers for Disease Control looked at the relationship between the price of beer and the incidence of new cases of STD's. The report concluded that a beer tax increase of $.20 could reduce overall STD rates by 8.9%. Assume that a six pack cost $5.90 before the price increase. Calculate the cross price elasticity between beer and STD's. What is the sign of this cross-price elasticity? According to your estimate, are beer and STD's compliments or substitutes? Does your answer make sense? Explain.
The figure to the right illustrates the demand for taxi rides in a large city. Suppose the price per ride is initially $35 but then falls to $25 due to a recession. What is the price elasticity of demand for taxi rides? Using the midpoint formula, the price elasticity of demand is. (Enter your response rounded to two decimal places.) Demand is unit-elastic inelastic elastic C Price (dollars per taxi ride) 60- 55- 50- 45- 40- 35- 30- 25- 20- 15- 10- 5- 0+ 0 A B D 40,000 80,000 120,000 160,000 200,000 240, Quantity (taxi rides per day)
The demand for ceiling fans can be modeled as D(p) = 25.02(0.992) thousand ceiling fans where p is the price (in dollars) of a ceiling fan. (a) Locate the point of unit elasticity. (Round your answers to two decimal places.) The point of elasticity occurs when p = $ and D(p) = thousand ceiling fans. (b) For what prices is demand elastic? For what prices is demand inelastic? (Round your numerical answers to two decimal places.) Demand is inelastic for < p < Demand is elastic for p ? ✓
On the graph to the right, show the elastic and inelastic portions of a linear demand curve. 1.) Using the double-arrow line drawing tool, show the elastic region of the demand curve by drawing a line segment on top of the portion of the curve that is elastic. Label this line 'Elastic. 2.) Using the double-arrow line drawing tool, show the inelastic region of the demand curve by drawing a line segment on top of the portion of the curve that is inelastic. Label this line 'Inelastic. Carefully follow the instructions above and only draw the required objects. Price per unit ($) 50 45 40 35- 30- 25 20 15- 10- 54 0 0 Demand 10 15 20 25 30 35 40 45 50 Quantity per unit of time Q Q G

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