A Local Transit Authority Charges $1 for a Bus Ride

question 406

Multiple Choice

A local transit authority charges $1 for a bus ride. An economics study suggests that in the price range from $0.50 to $1.50, the elasticity of demand for bus trips is 1.2. To increase its revenue, the transit authority should

• A) leave the fare as it is.
• B) raise the fare.
• C) lower the fare.
• D) charge $1.20.

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Definitions:

Sperling's Experiment

A psychological study by George Sperling that showed the existence of a brief sensory memory, using a grid of letters and a tone cue for recall.

Sensory Registers

The initial processing centers in the sensory system where sensory information is received and held briefly before it is processed further.

Semantic Network Model

A cognitive framework that represents semantic relationships between concepts in networks, allowing for understanding of how concepts are interrelated.

Nodes

Points in a network or system where connections are made, often used to describe elements in a computational network or points within a distribution system.