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Textbooks / Business / Principles of Economics 6 / Chapter 5 / Problem Problems and Applications 5.9

The New York Times reported (Feb. 17, 1996) that subway ridership declined after a fare

Principles of Economics | 6th Edition | ISBN: 9780538453059 | Authors: N. Gregory Mankiw ISBN: 9780538453059 472

Solution for problem Problems and Applications 5.9 Chapter 5

Principles of Economics | 6th Edition

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Principles of Economics | 6th Edition | ISBN: 9780538453059 | Authors: N. Gregory Mankiw

Principles of Economics | 6th Edition

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Problem Problems and Applications 5.9

The New York Times reported (Feb. 17, 1996) that subway ridership declined after a fare increase: There were nearly four million fewer riders in December 1995, the first full month after the price of a token increased 25 cents to $1.50, than in the previous December, a 4.3 percent decline. a. Use these data to estimate the price elasticity of demand for subway rides. b. According to your estimate, what happens to the Transit Authoritys revenue when the fare rises? c. Why might your estimate of the elasticity be unreliable?

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Mason Belcher 1 Econ Assignment 9 1. An increase in the price levels will result in inflation, which in turn causes a decline in the real value of money and raises quantity of money demanded. 2. Using the quantity theory of money will show that an effect in a increase in the quantity of money is a increase of the price level and inflation as well as a decrease in the value of money. 3. a. before: 10-5= 5 After: 10x(1-.4) = 6 6-5=1 b. Before: 6-2= 4 After: 6x(1-.4) =3.6 3.6-2=1.6 c. Before: 4-1=3 After: 4x(1-.4) = 2.4 2.4-1= 1.4 4. a. Price level: 10,000÷5,000= 2 Velocity: 10,000÷500= 20 b. Given the M and V re

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Textbook: Principles of Economics
Edition: 6
Author: N. Gregory Mankiw
ISBN: 9780538453059

This full solution covers the following key subjects: . This expansive textbook survival guide covers 36 chapters, and 670 solutions. The full step-by-step solution to problem: Problems and Applications 5.9 from chapter: 5 was answered by , our top Business solution expert on 03/16/18, 04:26PM. Since the solution to Problems and Applications 5.9 from 5 chapter was answered, more than 243 students have viewed the full step-by-step answer. Principles of Economics was written by and is associated to the ISBN: 9780538453059. The answer to “The New York Times reported (Feb. 17, 1996) that subway ridership declined after a fare increase: There were nearly four million fewer riders in December 1995, the first full month after the price of a token increased 25 cents to $1.50, than in the previous December, a 4.3 percent decline. a. Use these data to estimate the price elasticity of demand for subway rides. b. According to your estimate, what happens to the Transit Authoritys revenue when the fare rises? c. Why might your estimate of the elasticity be unreliable?” is broken down into a number of easy to follow steps, and 90 words. This textbook survival guide was created for the textbook: Principles of Economics, edition: 6.

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The New York Times reported (Feb. 17, 1996) that subway ridership declined after a fare