Sun City’s public bus line has been operating at a deficit. The city decides to raise the fare from 50 cents to 75 cents, anticipating enough additional revenue to cover the deficit. What assumption is the city making about price elasticity?
What will be an ideal response?
Sun City is assuming demand is price inelastic. This means an increase in revenue would accompany an increase in price.
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Washington D.C.'s metro train system is being extended further into the neighboring states of Maryland and Virginia, thereby reducing the cost of commuting into the United States' capitol
Other things being held constant, this can be expected to: A) decrease the extent of the market for housing around Washington D.C. B) increase the extent of the market for housing around Washington D.C. C) have no effect on the extent of the market for housing around Washington D.C. as the actual geography remains unchanged. D) have no effect on the extent of the market for housing around Washington D.C. as the range of houses available has not changed. E) have no effect on the extent of the market for housing around Washington D.C. as property taxes have not changed.
As interest rates rise, the quantity of money demanded
A) falls. B) rises. C) stays the same. D) does not react to interest rate changes.