A university decides to change its late night bus service between the campus and

Question

A university decides to change its late night bus service between the campus and student housing from a fa This statement means fare-based service to a free service. The university's decision is a that the incentive to ride the busand the opportunity cost of a bus ride decision. Select one 0 a, remains the same / remains the same , microeconomic O b.changes / decreases/ microeconomic Oc.changes/ increases /microeconomic O d. changes / decreases / macroeconomic O e. remains the same /remains the same / macroeconomic

Explanation / Answer

A free service will encourage more riders to travel so that there will be an increase in the number of commuters. Because now there is a free service from a paid service the opportunity cost of travelling is reduced. This is definitely a microeconomic decision because it is related to a particular University.

Select Option B.  

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