EC-252: Principles of Microeconomics

Spring 2021

Extra Credit #1

Due Date: Friday, January 22, 2021

Name: _________________________________________________________

Read the article about Uber titled "In Praise of Efficient Price Gouging"[1] from the MIT Technology Review.You can also use Wikipedia as a source for more background information[2] on Uber.You must include a brief summary of the article and then an argument either supporting or refuting the author's position.To produce a decent response, I expect at least two double-spaced full pages.It also should be obvious that correct spelling, grammar, language, etc., are required since this is an extra credit assignment.Some questions to keep in mind are the following (these do not necessarily have to be addressed, but they are intended to help focus and streamline your response):

Put yourself in the shoes of an Uber customer.Why is "surge pricing" so annoying?What is your outside option if you want to avoid "surge pricing?"

Put yourself in the shoes of an Uber driver.Do you like surge pricing (and hence "surge pay")?

Put yourself in the shoes of a business owner.If you could get every customer to pay higher prices at certain times, would you want to do that?What are the benefits/drawbacks to that pricing behavior?

[1] Surowiecki, J.(2014, August 19).In praise of efficient price gouging.In MIT Technology Review.Retrieved from https://www.technologyreview.com/s/529961/in-praise-of-efficient-price-gouging/.

[2] Wikipedia contributors.(2020, January 11).Uber.In Wikipedia, The Free Encyclopedia.Retrieved from https://en.wikipedia.org/w/index.php?title=Uber&oldid=935278223.