Flashcards on Ten Principles of Economics
Ten Principles of Economics Explained for Students
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Transport Market Regulation
10 cards
Card 1
Question: How can a government limit entry into the taxi market?
Answer: By approving only a certain number of taxi medallions or permits.
Card 2
Question: What regulatory power can a government use to control taxi prices and enforce rules?
Answer: Police powers, including the threat of fines or jail time to keep unauthorized drivers off the streets and prevent charging unauthorized prices.
Card 3
Question: Why are Uber cars often not subject to the same taxi regulations?
Answer: Because Uber cars do not roam the streets looking for taxi-hailing pedestrians and are technically not taxis, so they are not subject to the same regu
Card 4
Question: What convenience advantage do app-based services like Uber offer compared with traditional taxis?
Answer: Passengers can remain inside, use a smartphone to arrange a ride, and avoid waiting on the street in bad weather.
Card 5
Question: How does Uber's pricing compare to regulated taxis?
Answer: Uber cars often charge less than taxis, but not always; Uber allows drivers to raise prices significantly during surge demand while regulated taxis ar
Card 6
Question: What is surge pricing and when does it occur?
Answer: Surge pricing is significant price increases by drivers when demand surges, such as during sudden rainstorms or late on New Year's Eve.
Card 7
Question: Why do traditional taxi drivers oppose services like Uber?
Answer: They complain that the new competition eats into their source of income.
Card 8
Question: From an economist's perspective, why is competition from services like Uber considered beneficial?
Answer: Vigorous competition among producers makes a market work well for consumers, improving consumer well-being.
Card 9
Question: What did a 2014 survey of economists conclude about car services such as Uber and consumer well-being?
Answer: All surveyed economists said such car services increased consumer well-being.
Card 10
Question: What proportion of surveyed economists said surge pricing increased consumer well-being, and why?
Answer: 85% said surge pricing increased consumer well-being because it increases the quantity of car services when most needed, allocates services to those w