1. (a) In most developing countries, there are long lines of taxis at the airport, and these taxis often waittwo to three hours before getting a passenger. What does this tell you about the current price in the cab-service market relative to the equilibrium price? Show this graphically with demand and supply.(b) From part (a), if you were one of these taxi drivers waiting to pick up a passenger, and given that youdon't like waiting for hours to get passengers (because time is money!!), what might you do?? Explain.2. During the first snow storm of the season the one thing you cannot find in your garage is the shovel. Asthe ground collects snow, you start walking to the closest hardware store only to find out that the store hassold out all the shovels as many people walk home upset and empty-handed. What was the shovel price atthe store in comparison to the equilibrium price of a shovel on that particular day? Explain your answerwith a D-S diagram.3. A 'drought simply is a situation in which quantity of water demanded exceeds quantity of watersupplied. With THIS definition of a drought in mind, draw a demand-supply diagram for the water marketportraying a drought. sa drought have anything to do with the price of water? How might a 'drought'be resolved?4. (a) How do empty seats at the Detroit Tigers baseball game this past summer have anything to do withthe prices of tickets?(b) What about the (virtual) lines on the TicketMaster website this past June when people weretrying to get their Taylor Swift concert tickets - how do they have anything to do withthe ticket prices?

***Since the student has posted multiple questions, the expert is required to solve only the first…

1. (a) In most developing countries, there are long lines of taxis at the airport, and these taxis often wait two to three hours before getting a passenger. What does this tell you about the current price in the cab- service market relative to the equilibrium price? Show this graphically with demand and supply. (b) From part (a), if you were one of these taxi drivers waiting to pick up a passenger, and given that you don't like waiting for hours to get passengers (because time is money!!), what might you do?? Explain.

1. (a) In most developing countries, there are long lines of taxis at the airport, and these taxis often wait two to three hours before getting a passenger. What does this tell you about the current price in the cab- service market relative to the equilibrium price? Show this graphically with demand and supply. (b) From part (a), if you were one of these taxi drivers waiting to pick up a passenger, and given that you don't like waiting for hours to get passengers (because time is money!!), what might you do?? Explain.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter4: The Market Forces Of Supply And Demand

Section: Chapter Questions

Problem 8PA

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Similar questions

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