1. Graphically, what impact would an increase in the price of jet fuel have on t
ID: 1177691 • Letter: 1
Question
1. Graphically, what impact would an increase in the price of jet fuel have on the market for air travel?
a.
It would shift the supply curve for air travel to the right.
b.
It would shift the supply curve for air travel to the left.
c.
It would shift the demand curve for air travel to the right.
d.
It would shift the demand curve for air travel to the left
I think It's A but am not certain
2. Suppose demand increases and supply increases. Which of the following will happen?
a.
Equilibrium price will rise, fall, or stay the same while equilibrium quantity will decrease.
b.
Equilibrium price will rise, fall, or stay the same while equilibrium quantity will increase.
c.
Equilibrium quantity will rise, fall, or stay the same and equilibrium price will increase.
d.
Equilibrium quantity will rise, fall, or stay the same while equilibrium price will decrease.
e.
The change in equilibrium price and quantity cannot be determined
I think it's B
3. Consider two goods - one that generates external benefits and another that generates external costs. The actual market outcome would
a.
result in a price that is lower than the efficient price for both goods.
b.
result in a price that is higher than the efficient price for both goods.
c.
result in a price that is lower than the efficient price for the good with an external benefit and a price that is higher than the efficient price for the good with an external cost.
d.
result in a price that is higher than the efficient price for the good with an external benefit and a price that is lower than the efficient price for the good with an external cost
1. Graphically, what impact would an increase in the price of jet fuel have on the market for air travel?
Explanation / Answer
1.b It would shift the supply curve for air travel to the left.
2.b Equilibrium price will rise, fall, or stay the same while equilibrium quantity will increase.
3.c result in a price that is lower than the efficient price for the good with an external benefit and a price that is higher than the efficient price for the good with an external cost.
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