If more people carpool then for all practical

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Unformatted text preview: to meet the quantity demanded at zero price at 8 a.m. The problem of freeway congestion is solved. If more people carpool, then for all practical purposes the demand for freeway space Offshoring In 2003, the McKinsey Global Institute calculated that offshoring (U.S. companies hiring workers in other countries) came with both costs and benefits but that overall the benefits were greater than costs. One benefit, especially noted, was lower costs for U.S. companies. How might lower costs for U.S. companies affect both the supply of goods in the United States and the prices customers pay for those goods? ECONOMIC THINKING falls as in Exhibit 6-7(c). In other words, if people carpool to such an extent that the demand for driving on the freeway drops by as much as shown in the exhibit, then freeway space is able to meet the quantity demanded at zero price at 8 a.m. The shortage of freeway space again is eliminated. Of course, as is probably evident now, a third way can be used to get rid of freeway congestion. It has nothing to do with building more freeways or carpooling. Freeway congestion can be eliminated by charging tolls. The tolls bring the freeway market into equilibrium. In other words, as shown in Exhibit 6-7(a), a toll of $1.50 would eliminate freeway congestion at 8 a.m. Supply and Demand on the Gridiron What factors determine how hard this player has to work and how skilled he has to be to win a position on the team? Suppose you want to try out for a high school sport, such as football, volleyball, or golf. How competitive do you have to be to get on the team? It depends on how many open positions are available on the team you want to try out for, as well as how many people are going to try out for those positions. How competitive you must be is a matter of the supply of positions and the demand for positions. Suppose you want to try out for tight end on the high school football team. The team’s coach has decided that he will have three tight ends on the team. In economic terms, Section 2 Supply and Demand in Everyday Life 145 06 (128-153) EMC Chap 06 11/21/...
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This document was uploaded on 01/16/2014.

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