Marginal effect


Marginal effect. Pull up the following article

Scroll about eight paragraphs down, to the simulation titled: “Faster pickup times mean more idle drivers.”

(a) There are two variables in the simulation. Identify the function (the variable that matters, but outside of Uber’s control) and the factor (the variable that does not matter, but is under Uber’s control)

Y is …

X is …

(b) Run the simulation to fill out the table below. The formula for marginal effect is:

ME yB yA

x xB xA

Observation # drivers Waiting time Marginal effect
A 50 ————-
B 75
C 125
D 250


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