Suppose That the Cost of Operating a Taxicab Is $25,000/year

question 1

Multiple Choice

Suppose that the cost of operating a taxicab is $25,000/year and that a cab in full-time operation will collect $35,000/year in fares.
-Refer to the information above.Suppose that entry into the taxi industry is restricted but medallions (licences) can be bought and sold.If the annual interest rate on savings accounts is 10%,then the equilibrium price of a medallion will be ________ and taxi drivers will earn ________ their opportunity cost.

• A) $10,000;more than
• B) $10,000;exactly
• C) $1000;exactly
• D) $100,000;more than
• E) $100,000;exactly

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Definitions:

Flow Time

The time taken for a unit to move through an entire system or process, from start to finish.

Work-In-Process

Items or materials that are in the stage of production but have not yet been completed.

Lateness

The occurrence of a task or delivery being completed past its expected or agreed-upon time.

Priority Rules

Guidelines or criteria used to determine the sequence in which tasks, projects, or products are addressed or processed.