The Following Data Show the Relationship Between the Number of Drivers

question 181

Multiple Choice

The following data show the relationship between the number of drivers who leave for work at 8:00 a.m. ,their average commute times,and their marginal benefit associated with the commute times.
-Refer to the data above.Suppose that a toll is imposed in the following way: leaving between 8:00 a.m.and 9:00 a.m.costs $5 per driver,while after 9:00 a.m.the toll is zero.One can predict that __________ drivers will leave after 9:00 a.m.

• A) 100
• B) 200
• C) 300
• D) 400
• E) 500

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Definitions:

Duration Predictions

Predictions about the length of time it will take for the price of a bond to be repaid by its internal cash flows.

Yield Falls

A situation where the yields on bonds decrease, which typically occurs when bond prices increase.

Convexity

A measure of the curvature or the degree of the curve in the relationship between bond prices and bond yields.

Basis Points

A unit of measure used in finance to describe the percentage change in the value or rate of a financial instrument; one basis point is equivalent to 0.01%.