Bridget Is Considering How to Get to Work Over the Summer.She

question 108

Essay

Bridget is considering how to get to work over the summer.She has two options.Option A is to buy a seasonal bus pass for $100.Option B is to pay $.25 for each ride.Identify the fixed and variable costs for each option.If she has to ride both to and from work,how many days of work would it take for the seasonal pass to cost the same amount as Option B?

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Definitions:

Normal Goods

Goods for which demand increases as the income of individuals increases, and vice versa.

Income Elasticity of Demand

An indicator of the responsiveness of the demand for a product to variations in consumer income.

Cross-Price Elasticity of Demand

A measure of how much the quantity demanded of one good responds to a change in the price of another good.

Quantity Purchased

The total amount of a good or service bought by consumers at a specific price level.