Chapter 4: Q3. (page 190)
Why has the fight between Uber and the taxicab industry turned political?
The fight between Uber and the taxicab industry turned political as the government got involved in the fight by favoring the taxicab.
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How did lenders benefit from the restriction on the number of New York City taxi medallions?
True or false? Explain your answer. A price ceiling below the equilibrium price of an otherwise efficient market does the following:
On game days, homeowners near Middletown University’s stadium used to rent parking spaces in their driveways to fans at a going rate of \(11. A new town ordinance now sets a maximum parking fee of \)7.
Use the accompanying supply and demand diagram to explain how each of the following corresponds to a price-ceiling concept.
Explain how each of the following adverse effects arises from the price ceiling.
d. Some fans now arrive several hours early to find parking.
e. Friends of homeowners near the stadium regularly attend games, even if they aren’t big fans. But some serious fans have given up because of the parking situation.
f. Some homeowners rent spaces for more than $7 but pretend that the buyers are nonpaying friends or family.
Use a graph to illustrate the effect of the entry of Uber on the incomes of taxicab drivers. Assume that Uber cars cannot pick up fares hailed from the street and that there are some people who prefer to hail cabs rather than use an app. How does your graph change if that restriction is lifted?
Suppose that the supply and demand for taxi rides is given by Figure 4-7 but the quota is set at 6 million rides instead of 8 million. Find the following and indicate them on Figure 4-7.
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