Economic Assignment

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Name Instructor’s Name Course Date Economics Assignment Question 1 Taxi services are almost the same as uber services. They, therefore, act as substitutes to each other. When taxis start charging higher prices, the demand for uber services will increase from Q1 to Q2 because they will appear cheaper to consumers. The demand for taxis, on the other hands, will reduce in the same measure The government’s investment into public transportation will reduce the cost of transportation. Uber consumers will, therefore, have more money to use uber services at will. The investment will, therefore, increase the demand for uber as shown in the graph below. The announcement will reduce the demand for uber as consumers will be reluctant to use them because of insecurity. The demand curve will, therefore, shift from D to D1, suggesting a decline in the quantity of uber demanded from Q to Q. The reduction in unemployment coupled with increase real wages and per capita income means that consumer a strong purchasing power as they have more money in their pockets. More consumers will be able to subscribe to uber services, leading to the increase of demand for uber Question 2 At equilibrium, Labor supply = Labor Demand Therefore, QS=QD10W=240-20W30W=240W=8Equilibrium price is £8 per hourEquilibrium quantity = (240-20(8))=80 driversThe minimum wage of £7 per hour is lower than £8. At this wage uber firms will be willing to higher more drivers, who will have to work for fewer hours worked than earlier and thus, lowering the market equilibrium. At a higher minimum wage of £9, the number drivers to be hired will be =240-20(9)=60 drivers. Supply of workers =

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