Gus the cab driver rents a cab and pays for gas. In each of the following circumstances, describe the short-run effect on the price and quantity of rides Gus offers.
a. The price of gas falls.
b. The rental price of cabs falls.
c. Word gets out that Gus is a really lousy driver.
d. A new bus company opens up.
e. Gus gets the bill for the new upholstery he installed in his back seat last month and discovers it's 15% more than he expected.
f. The wages of factory workers go up, though this ends up having no effect on the demand for cab rides.
g. A huge fire destroys half the cabs in town, not including Gus's.
h. The city imposes a $1 excise tax on cab rides, but exempts Gus from the tax because he is a good friend of the mayor.
i. The city imposes a $100 annual license fee on cab drivers, but gives Gus a free license because he is a good friend of the mayor.
j. The city starts a new free taxi service, which offers free rides to 500 customers per day.
k. The city offers to subsidize gas purchases for every cab driver except Gus because he is a special enemy of the mayor.
l. The city announces that it will start fining cab drivers who play loud music; Gus (unlike most cab drivers) loves loud music, so he has to pay a lot of fines.
m. A customer who was almost killed by Gus's recklessness agrees to accept a large payment in exchange for keeping quiet about the incident.