Impact of increased price of bus travel on the travel decision.

Question

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Answer 1

Question

Chapter 6, Problem 1P

(a)

To determine

Impact of increased price of bus travel on the travel decision.

(a)

Expert Solution

Explanation of Solution

The consumer decision depends on the price and the choices. When the price of a round ticket increases from $20 to $45, it means that the cost have been increased by 125 percent. Thus, the impact of such an increased fare on the individual will be higher. If the income remains unchanged, the impact will be much larger. This would reduce the disposable income to a greater extend. As a result, the frequency of visiting a friend would decline; otherwise less costly alternative methods come up in the economy for the individual.

Economics Concept Introduction

Consumer choices: The consumer choices are the decisions that the consumers take from the range of options that the consumers have. They determine the products that the consumers will purchase and consume over time with the given income.

(b)

To determine

The 25 percent cut in the tuition and its impact on the student.

(b)

Expert Solution

Explanation of Solution

The tuition fee is the main important fee that the students have to pay. When there is a 25 percent cut in the tuition fee, it will reduce the fee burden of the students. The students can use the money saved through 25 percent cut in tuition to watch movies or games or any other entertainment activities that might provide them with higher utilities. The students could make use of the time saved through 25 percent cut in the tuition to work and earn some wage.

(c)

To determine

Reward of $300 for 5 years and its impact on the individual.

(c)

Expert Solution

Explanation of Solution

The reward that the student receives acts as an additional income to the student. It is fixed for the next five years, which means that the student can save the money if required or use the money to meet their day-to-day expenses or the tuition fee expenses, and so forth. The student can go for some leisure activities, instead of working part-time to earn a little wage.

(d)

To determine

Impact of higher interest rate on the savings account.

(d)

Expert Solution

Explanation of Solution

The reward for not using the money and depositing it in the bank is the interest rate. When the interest rate increases, the interest amount that the depositor receives from the bank for their deposits increases. Thus, a higher interest rate will attract the individual to save more and consume less. Sometimes, the consumer will increase his consumption as the interest income earned by the investor increases.

(e)

To determine

Price of a meal doubles and its impact on the individual.

(e)

Expert Solution

Explanation of Solution

Food is an important factor which is required to keep the health of an individual intact. When the price of a meal doubles, the cost of the food doubles. Thus, the individual have to pay a double amount than before to get the meal. This results in lower disposable income of the individual. This might reduce the consumption of the individual and lead the individual to work more, in order to earn more to keep up the standard of living.

(f)

To determine

New part-time job offering and its impact on the individual.

(f)

Expert Solution

Explanation of Solution

When the new business opens up in the nearby locality, it can provide job to the individual. Thus, the individual can go for the job and earn an income which helps the individual to ease his living standards. As the number of hours working increases, it increases the wage earned by the individual as well as increase the demand for goods and services, including the leisure.

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Answer 2

Question

Chapter 6, Problem 1P

(a)

To determine

Impact of increased price of bus travel on the travel decision.

(a)

Expert Solution

Explanation of Solution

The consumer decision depends on the price and the choices. When the price of a round ticket increases from $20 to $45, it means that the cost have been increased by 125 percent. Thus, the impact of such an increased fare on the individual will be higher. If the income remains unchanged, the impact will be much larger. This would reduce the disposable income to a greater extend. As a result, the frequency of visiting a friend would decline; otherwise less costly alternative methods come up in the economy for the individual.

Economics Concept Introduction

Consumer choices: The consumer choices are the decisions that the consumers take from the range of options that the consumers have. They determine the products that the consumers will purchase and consume over time with the given income.

(b)

To determine

The 25 percent cut in the tuition and its impact on the student.

(b)

Expert Solution

Explanation of Solution

The tuition fee is the main important fee that the students have to pay. When there is a 25 percent cut in the tuition fee, it will reduce the fee burden of the students. The students can use the money saved through 25 percent cut in tuition to watch movies or games or any other entertainment activities that might provide them with higher utilities. The students could make use of the time saved through 25 percent cut in the tuition to work and earn some wage.

(c)

To determine

Reward of $300 for 5 years and its impact on the individual.

(c)

Expert Solution

Explanation of Solution

The reward that the student receives acts as an additional income to the student. It is fixed for the next five years, which means that the student can save the money if required or use the money to meet their day-to-day expenses or the tuition fee expenses, and so forth. The student can go for some leisure activities, instead of working part-time to earn a little wage.

(d)

To determine

Impact of higher interest rate on the savings account.

(d)

Expert Solution

Explanation of Solution

The reward for not using the money and depositing it in the bank is the interest rate. When the interest rate increases, the interest amount that the depositor receives from the bank for their deposits increases. Thus, a higher interest rate will attract the individual to save more and consume less. Sometimes, the consumer will increase his consumption as the interest income earned by the investor increases.

(e)

To determine

Price of a meal doubles and its impact on the individual.

(e)

Expert Solution

Explanation of Solution

Food is an important factor which is required to keep the health of an individual intact. When the price of a meal doubles, the cost of the food doubles. Thus, the individual have to pay a double amount than before to get the meal. This results in lower disposable income of the individual. This might reduce the consumption of the individual and lead the individual to work more, in order to earn more to keep up the standard of living.

(f)

To determine

New part-time job offering and its impact on the individual.

(f)

Expert Solution

Explanation of Solution

When the new business opens up in the nearby locality, it can provide job to the individual. Thus, the individual can go for the job and earn an income which helps the individual to ease his living standards. As the number of hours working increases, it increases the wage earned by the individual as well as increase the demand for goods and services, including the leisure.

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Answer 3

Question

Chapter 6, Problem 1P

(a)

To determine

Impact of increased price of bus travel on the travel decision.

(a)

Expert Solution

Explanation of Solution

The consumer decision depends on the price and the choices. When the price of a round ticket increases from $20 to $45, it means that the cost have been increased by 125 percent. Thus, the impact of such an increased fare on the individual will be higher. If the income remains unchanged, the impact will be much larger. This would reduce the disposable income to a greater extend. As a result, the frequency of visiting a friend would decline; otherwise less costly alternative methods come up in the economy for the individual.

Economics Concept Introduction

Consumer choices: The consumer choices are the decisions that the consumers take from the range of options that the consumers have. They determine the products that the consumers will purchase and consume over time with the given income.

(b)

To determine

The 25 percent cut in the tuition and its impact on the student.

(b)

Expert Solution

Explanation of Solution

The tuition fee is the main important fee that the students have to pay. When there is a 25 percent cut in the tuition fee, it will reduce the fee burden of the students. The students can use the money saved through 25 percent cut in tuition to watch movies or games or any other entertainment activities that might provide them with higher utilities. The students could make use of the time saved through 25 percent cut in the tuition to work and earn some wage.

(c)

To determine

Reward of $300 for 5 years and its impact on the individual.

(c)

Expert Solution

Explanation of Solution

The reward that the student receives acts as an additional income to the student. It is fixed for the next five years, which means that the student can save the money if required or use the money to meet their day-to-day expenses or the tuition fee expenses, and so forth. The student can go for some leisure activities, instead of working part-time to earn a little wage.

(d)

To determine

Impact of higher interest rate on the savings account.

(d)

Expert Solution

Explanation of Solution

The reward for not using the money and depositing it in the bank is the interest rate. When the interest rate increases, the interest amount that the depositor receives from the bank for their deposits increases. Thus, a higher interest rate will attract the individual to save more and consume less. Sometimes, the consumer will increase his consumption as the interest income earned by the investor increases.

(e)

To determine

Price of a meal doubles and its impact on the individual.

(e)

Expert Solution

Explanation of Solution

Food is an important factor which is required to keep the health of an individual intact. When the price of a meal doubles, the cost of the food doubles. Thus, the individual have to pay a double amount than before to get the meal. This results in lower disposable income of the individual. This might reduce the consumption of the individual and lead the individual to work more, in order to earn more to keep up the standard of living.

(f)

To determine

New part-time job offering and its impact on the individual.

(f)

Expert Solution

Explanation of Solution

When the new business opens up in the nearby locality, it can provide job to the individual. Thus, the individual can go for the job and earn an income which helps the individual to ease his living standards. As the number of hours working increases, it increases the wage earned by the individual as well as increase the demand for goods and services, including the leisure.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 6, Problem 1P

(a)

To determine

Impact of increased price of bus travel on the travel decision.

(a)

Expert Solution

Explanation of Solution

The consumer decision depends on the price and the choices. When the price of a round ticket increases from $20 to $45, it means that the cost have been increased by 125 percent. Thus, the impact of such an increased fare on the individual will be higher. If the income remains unchanged, the impact will be much larger. This would reduce the disposable income to a greater extend. As a result, the frequency of visiting a friend would decline; otherwise less costly alternative methods come up in the economy for the individual.

Economics Concept Introduction

Consumer choices: The consumer choices are the decisions that the consumers take from the range of options that the consumers have. They determine the products that the consumers will purchase and consume over time with the given income.

(b)

To determine

The 25 percent cut in the tuition and its impact on the student.

(b)

Expert Solution

Explanation of Solution

The tuition fee is the main important fee that the students have to pay. When there is a 25 percent cut in the tuition fee, it will reduce the fee burden of the students. The students can use the money saved through 25 percent cut in tuition to watch movies or games or any other entertainment activities that might provide them with higher utilities. The students could make use of the time saved through 25 percent cut in the tuition to work and earn some wage.

(c)

To determine

Reward of $300 for 5 years and its impact on the individual.

(c)

Expert Solution

Explanation of Solution

The reward that the student receives acts as an additional income to the student. It is fixed for the next five years, which means that the student can save the money if required or use the money to meet their day-to-day expenses or the tuition fee expenses, and so forth. The student can go for some leisure activities, instead of working part-time to earn a little wage.

(d)

To determine

Impact of higher interest rate on the savings account.

(d)

Expert Solution

Explanation of Solution

The reward for not using the money and depositing it in the bank is the interest rate. When the interest rate increases, the interest amount that the depositor receives from the bank for their deposits increases. Thus, a higher interest rate will attract the individual to save more and consume less. Sometimes, the consumer will increase his consumption as the interest income earned by the investor increases.

(e)

To determine

Price of a meal doubles and its impact on the individual.

(e)

Expert Solution

Explanation of Solution

Food is an important factor which is required to keep the health of an individual intact. When the price of a meal doubles, the cost of the food doubles. Thus, the individual have to pay a double amount than before to get the meal. This results in lower disposable income of the individual. This might reduce the consumption of the individual and lead the individual to work more, in order to earn more to keep up the standard of living.

(f)

To determine

New part-time job offering and its impact on the individual.

(f)

Expert Solution

Explanation of Solution

When the new business opens up in the nearby locality, it can provide job to the individual. Thus, the individual can go for the job and earn an income which helps the individual to ease his living standards. As the number of hours working increases, it increases the wage earned by the individual as well as increase the demand for goods and services, including the leisure.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 6, Problem 1P

(a)

To determine

Impact of increased price of bus travel on the travel decision.

(a)

Expert Solution

Explanation of Solution

The consumer decision depends on the price and the choices. When the price of a round ticket increases from $20 to $45, it means that the cost have been increased by 125 percent. Thus, the impact of such an increased fare on the individual will be higher. If the income remains unchanged, the impact will be much larger. This would reduce the disposable income to a greater extend. As a result, the frequency of visiting a friend would decline; otherwise less costly alternative methods come up in the economy for the individual.

Economics Concept Introduction

Consumer choices: The consumer choices are the decisions that the consumers take from the range of options that the consumers have. They determine the products that the consumers will purchase and consume over time with the given income.

(b)

To determine

The 25 percent cut in the tuition and its impact on the student.

(b)

Expert Solution

Explanation of Solution

The tuition fee is the main important fee that the students have to pay. When there is a 25 percent cut in the tuition fee, it will reduce the fee burden of the students. The students can use the money saved through 25 percent cut in tuition to watch movies or games or any other entertainment activities that might provide them with higher utilities. The students could make use of the time saved through 25 percent cut in the tuition to work and earn some wage.

(c)

To determine

Reward of $300 for 5 years and its impact on the individual.

(c)

Expert Solution

Explanation of Solution

The reward that the student receives acts as an additional income to the student. It is fixed for the next five years, which means that the student can save the money if required or use the money to meet their day-to-day expenses or the tuition fee expenses, and so forth. The student can go for some leisure activities, instead of working part-time to earn a little wage.

(d)

To determine

Impact of higher interest rate on the savings account.

(d)

Expert Solution

Explanation of Solution

The reward for not using the money and depositing it in the bank is the interest rate. When the interest rate increases, the interest amount that the depositor receives from the bank for their deposits increases. Thus, a higher interest rate will attract the individual to save more and consume less. Sometimes, the consumer will increase his consumption as the interest income earned by the investor increases.

(e)

To determine

Price of a meal doubles and its impact on the individual.

(e)

Expert Solution

Explanation of Solution

Food is an important factor which is required to keep the health of an individual intact. When the price of a meal doubles, the cost of the food doubles. Thus, the individual have to pay a double amount than before to get the meal. This results in lower disposable income of the individual. This might reduce the consumption of the individual and lead the individual to work more, in order to earn more to keep up the standard of living.

(f)

To determine

New part-time job offering and its impact on the individual.

(f)

Expert Solution

Explanation of Solution

When the new business opens up in the nearby locality, it can provide job to the individual. Thus, the individual can go for the job and earn an income which helps the individual to ease his living standards. As the number of hours working increases, it increases the wage earned by the individual as well as increase the demand for goods and services, including the leisure.

Answer 6

Chapter 6, Problem 1P

(a)

To determine

Impact of increased price of bus travel on the travel decision.

(a)

Expert Solution

Explanation of Solution

The consumer decision depends on the price and the choices. When the price of a round ticket increases from $20 to $45, it means that the cost have been increased by 125 percent. Thus, the impact of such an increased fare on the individual will be higher. If the income remains unchanged, the impact will be much larger. This would reduce the disposable income to a greater extend. As a result, the frequency of visiting a friend would decline; otherwise less costly alternative methods come up in the economy for the individual.

Economics Concept Introduction

Consumer choices: The consumer choices are the decisions that the consumers take from the range of options that the consumers have. They determine the products that the consumers will purchase and consume over time with the given income.

Answer 7

Chapter 6, Problem 1P

(a)

To determine

Impact of increased price of bus travel on the travel decision.

Answer 8

(a)

Expert Solution

Explanation of Solution

The consumer decision depends on the price and the choices. When the price of a round ticket increases from $20 to $45, it means that the cost have been increased by 125 percent. Thus, the impact of such an increased fare on the individual will be higher. If the income remains unchanged, the impact will be much larger. This would reduce the disposable income to a greater extend. As a result, the frequency of visiting a friend would decline; otherwise less costly alternative methods come up in the economy for the individual.

Answer 9

(a)

Expert Solution

Answer 10

(a)

Expert Solution

Answer 11

Expert Solution

Answer 12

Economics Concept Introduction

Consumer choices: The consumer choices are the decisions that the consumers take from the range of options that the consumers have. They determine the products that the consumers will purchase and consume over time with the given income.

Answer 13

(b)

To determine

The 25 percent cut in the tuition and its impact on the student.

(b)

Expert Solution

Explanation of Solution

The tuition fee is the main important fee that the students have to pay. When there is a 25 percent cut in the tuition fee, it will reduce the fee burden of the students. The students can use the money saved through 25 percent cut in tuition to watch movies or games or any other entertainment activities that might provide them with higher utilities. The students could make use of the time saved through 25 percent cut in the tuition to work and earn some wage.

Answer 14

(b)

To determine

The 25 percent cut in the tuition and its impact on the student.

Answer 15

(b)

Expert Solution

Explanation of Solution

The tuition fee is the main important fee that the students have to pay. When there is a 25 percent cut in the tuition fee, it will reduce the fee burden of the students. The students can use the money saved through 25 percent cut in tuition to watch movies or games or any other entertainment activities that might provide them with higher utilities. The students could make use of the time saved through 25 percent cut in the tuition to work and earn some wage.

Answer 16

(b)

Expert Solution

Answer 17

(b)

Expert Solution

Answer 18

Expert Solution

Answer 19

(c)

To determine

Reward of $300 for 5 years and its impact on the individual.

(c)

Expert Solution

Explanation of Solution

The reward that the student receives acts as an additional income to the student. It is fixed for the next five years, which means that the student can save the money if required or use the money to meet their day-to-day expenses or the tuition fee expenses, and so forth. The student can go for some leisure activities, instead of working part-time to earn a little wage.

Answer 20

(c)

To determine

Reward of $300 for 5 years and its impact on the individual.

Answer 21

(c)

Expert Solution

Explanation of Solution

The reward that the student receives acts as an additional income to the student. It is fixed for the next five years, which means that the student can save the money if required or use the money to meet their day-to-day expenses or the tuition fee expenses, and so forth. The student can go for some leisure activities, instead of working part-time to earn a little wage.

Answer 22

(c)

Expert Solution

Answer 23

(c)

Expert Solution

Answer 24

Expert Solution

Answer 25

(d)

To determine

Impact of higher interest rate on the savings account.

(d)

Expert Solution

Explanation of Solution

The reward for not using the money and depositing it in the bank is the interest rate. When the interest rate increases, the interest amount that the depositor receives from the bank for their deposits increases. Thus, a higher interest rate will attract the individual to save more and consume less. Sometimes, the consumer will increase his consumption as the interest income earned by the investor increases.

Answer 26

(d)

To determine

Impact of higher interest rate on the savings account.

Answer 27

(d)

Expert Solution

Explanation of Solution

The reward for not using the money and depositing it in the bank is the interest rate. When the interest rate increases, the interest amount that the depositor receives from the bank for their deposits increases. Thus, a higher interest rate will attract the individual to save more and consume less. Sometimes, the consumer will increase his consumption as the interest income earned by the investor increases.

Answer 28

(d)

Expert Solution

Answer 29

(d)

Expert Solution

Answer 30

Expert Solution

Answer 31

(e)

To determine

Price of a meal doubles and its impact on the individual.

(e)

Expert Solution

Explanation of Solution

Food is an important factor which is required to keep the health of an individual intact. When the price of a meal doubles, the cost of the food doubles. Thus, the individual have to pay a double amount than before to get the meal. This results in lower disposable income of the individual. This might reduce the consumption of the individual and lead the individual to work more, in order to earn more to keep up the standard of living.

Answer 32

(e)

To determine

Price of a meal doubles and its impact on the individual.

Answer 33

(e)

Expert Solution

Explanation of Solution

Food is an important factor which is required to keep the health of an individual intact. When the price of a meal doubles, the cost of the food doubles. Thus, the individual have to pay a double amount than before to get the meal. This results in lower disposable income of the individual. This might reduce the consumption of the individual and lead the individual to work more, in order to earn more to keep up the standard of living.

Answer 34

(e)

Expert Solution

Answer 35

(e)

Expert Solution

Answer 36

Expert Solution

Answer 37

(f)

To determine

New part-time job offering and its impact on the individual.

(f)

Expert Solution

Explanation of Solution

When the new business opens up in the nearby locality, it can provide job to the individual. Thus, the individual can go for the job and earn an income which helps the individual to ease his living standards. As the number of hours working increases, it increases the wage earned by the individual as well as increase the demand for goods and services, including the leisure.

Answer 38

(f)

To determine

New part-time job offering and its impact on the individual.

Answer 39

(f)

Expert Solution

Explanation of Solution

When the new business opens up in the nearby locality, it can provide job to the individual. Thus, the individual can go for the job and earn an income which helps the individual to ease his living standards. As the number of hours working increases, it increases the wage earned by the individual as well as increase the demand for goods and services, including the leisure.