Discuss the following statement: ‘The sharp increase in cab fares on a snowy day in New...

Discuss the following statement: ‘The sharp increase in cab fares on a snowy day in New York led to severe criticism of Uber on social media, but a sharp increase in the price of gold has no such effect.’

Expert Solution

Answer

The cab fare of Uber highly depend on the demand- supply forces in the market. The higher the demand for Uber, the higher is the fare for Uber ride. The fare of Uber also depends on weather condition.Now, when its a snowy day, the demand for Uber ride increases.At this time, the Uber can be considered as an essential good. At this weather condition, many people want the Uber ride, but if the Uber hikes the fare, some people won't be able to afford the Uber ride. So, the sharp increase in the fare of Uber on a snowy evening led to severe criticism on social media.

The gold is a luxury good. It is highly valuable and thus t's price is always high. The demand for gold in the market is not as high as the demand for Uber on a snowy day in New York. Thus, if there is a sharp increase in the price of gold, it won't affect the common people much.

So, the sharp increase in cab fares on a snowy day in New York led to severe criticism of Uber on social media, but a sharp increase in the price of gold has no such effect.

_____________________________________________________________

Rahul Sunny answered 2 years ago

Assume a sharp increase in government deficit occurs and it is financed by issuing new bonds....

Assume a sharp increase in government deficit occurs and it is financed by issuing new bonds. Using the supply and demand in the bond market model, what would be the resulting effect on the interest rate? Explain your answer. Your explanation shall at least include the following: (i) specify whether this shock refers to shifter/determinant of the demand curve or the supply curve, (ii) what happens to such curve, (iii) what is the impact on the market equilibrium--whether it remains...

Discuss the following statement: (Omani Commercial Law binds the trader to keep the day-book and the...

Discuss the following statement: (Omani Commercial Law binds the trader to keep the day-book and the general ledger book for ten years).

3.Following 2 decades of relatively low fertility, the US had a baby boom (sharp increase in...

3.Following 2 decades of relatively low fertility, the US had a baby boom (sharp increase in fertility) from about 1950 to 1970, then declining fertility since then. [15 points] a.Draw and explain age pyramids for the US in 1990 and 2020. b.What is the NAIRU? What do the letters stand for, and what does it mean in plain English? c.Explain how changes in US fertility over time and the shape of the age pyramids affected the NAIRU in 1990 and...

Discuss the strategies to attain and increase organizational skills and priority setting for new nurses

Discuss with details, how an interest rate increase will affet banks' balance sheet and income statement...

Discuss with details, how an interest rate increase will affet banks' balance sheet and income statement in terms of profitability and risk.

1. a recent news broadcast made the following statement : "an increase in the price of...

1. a recent news broadcast made the following statement : "an increase in the price of coffee has caused a decrease in the demand of coffee". Would an economist agree with this statement? (carefully look at the wording.) a)yes, an economist would agree with this statement b) no, an economist would not agree 2. A price ceiling causes the actual number of units of a good bought and sold to decrease compared to the equilibrium quantity. A price floor causes...

State whether the following statement is true or false AND explain why: "An increase in the...

State whether the following statement is true or false AND explain why: "An increase in the interest rate paid on excess reserves will always cause an increase in the federal reserve funds rate."

The following is the income statement for Daisy’s Day Care Limited for the month ended March...

The following is the income statement for Daisy’s Day Care Limited for the month ended March 31, 2020: Daisy’s Day Care Limited Income Statement Month Ended March 31, 2020 Revenue $ 20,000 Expenses: Food 6,000 Heat and lights 800 Office Supplies 200 Childcare supplies 1,000 Wages 8,000 Total expenses 16,000 Operating income $ 4,000 20% of the childcare supplies and 25% of the wages are fixed while the remaining amounts are variable. 100% of the food expense is variable. Required:...

1. For the following statement, indicate whether what is described would result in an increase or...

1. For the following statement, indicate whether what is described would result in an increase or decrease in genetic diversity within population. a. Inbreeding due to a small population that is geographically isolated b. A 10,000 person population growing from the movement of 5,000 people into the population coming from another geographically isolated location. c. A catastrophic tsunami that drastically reduces the size of population. d. A small group of individuals from one population moving to a geographically distant site...

QUESTION 43 How many of the following statements is/are true? Statement 1: An increase in the...

QUESTION 43 How many of the following statements is/are true? Statement 1: An increase in the market YTM after a bond is purchased but before the first coupon date will lead to a realized return equal to the YTM of the bond when the bond was purchased for a buy-and-investor. Statement 2: A decrease in the market YTM after a bond is purchased but before the first coupon date will lead to a realized return equal to the YTM of...

Question