A local transit authority charges $1 for a bus ride. An economics study suggests that in the price range from $0.50 to $1.50, the elasticity of demand for bus trips is 1.2. To increase its revenue, the transit authority should
A) leave the fare as it is.
B) raise the fare.
C) lower the fare.
D) charge $1.20.
Answer: C
Economics
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An externality is
A) a cost paid for by the producer of a good or service. B) a benefit realized by the purchaser of a good or service. C) anything that is external or not relevant to the production of a good or service. D) a benefit or cost experienced by someone who is not a producer or consumer of a good or service.
Economics
The potential rewards that are available to an individual if a particular activity is undertaken are known as
A) greed. B) irrational thought processes. C) incentives. D) intrinsic values.
Economics