According to a Recent Study of Chilean Bus Drivers,drivers Who

question 195

Multiple Choice

According to a recent study of Chilean bus drivers,drivers who are paid by the number of passengers they transport have higher productivity than drivers who are paid by the hour.This result is an example of which principle of economics?

• A) People face tradeoffs.
• B) The cost of something is what you give up to get it.
• C) Rational people think at the margin.
• D) People respond to incentives.

---

Definitions:

Selling Price

The amount a buyer pays to purchase a product or service from a seller.

Variable Cost

A cost that varies with the level of output or production, such as materials and labor directly involved in manufacturing.

Fixed Costs

Expenses that do not change with the level of goods or services produced by a business, such as rent or a salaried employee's wages.

Variable Costs

Expenses that change in proportion to the activity or volume of production, sales, or services rendered.