Advantages And Disadvantages Of Taking A Taxi

Register to read the introduction… You do not have any car or motorcycle that can reach your office. Either you cannot rent a room or house that is closer to your office due to your income. So the best way to go there is by taking a bus everyday because it is quite impossible to take a taxi cab since your income is very limited. It is better to take a bus which is cheaper than taxi and easy to be found, but it is more time consuming and less convenient compared to taxi cab. When money is constricted, travelling by bus becomes more acceptable, but when money is more abundant that time, more rapid transport is …show more content…
Of course this is followed by the rising salary every month. Now you earn Rp. 5,000,000 per month. This rising salary leads to your desire to reduce the time you spend everyday to wait for the bus and of course to get more convenience. You start to think about taking taxi everyday to your office. As your income has risen, you have the ability to afford the taxi fare. Assumed the taxi fare for one way is Rp 40,000. So to go back-and-forth everyday is Rp 80,000. Your spending for taxi for one month is Rp 1,600,000 (20 days x Rp 80,000). So you have Rp 3,400,000 for saving, living cost, shopping, and other expenses every month. This is quite impossible if your income still Rp 2,000,000 and you will end up with only Rp 400,000 …show more content…
Income relates to household behavior and consumers’ choices. Income, price, and wealth are factors that make the budget constraint. Budget constraint (BC) relates to indifference curve (IC) that reflects consumers’ taste. Indifference curve is a curve that shows the consumption bundles that give the consumer the same level of satisfaction. Budget constraint shows the combination of goods the consumer’s can afford given his income and the price of the goods. BC is a straight downward line while IC is a bowed inward