If New York City Expects That an Increase in Bus

question 99

Multiple Choice

If New York City expects that an increase in bus fares will raise mass transit revenues, it must think that the demand for bus travel is:

• A) elastic.
• B) unit elastic.
• C) inelastic.
• D) perfectly inelastic.

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Definitions:

Production Possibility Frontier

A curve depicting all maximum output possibilities for two or more goods given a set of inputs (resources), embodying the principle of opportunity costs.

Opportunity Cost

Bypassing potential gains from a range of alternatives by finalizing one choice.

Production Possibility Frontier

A curve depicting all maximum output possibilities for two or more goods given a set of inputs (resources), representing the trade-offs of producing one good over another.

Trade-Offs

Situations where having more of one thing invariably leads to having less of another due to limited resources or constraints.