Why did the attempts by some airlines to introduce uniform pricing for all air trips in 1980s and 1990s fail?
As soon as new higher fares were announced, airlines began offering discounts on them. Competition turned the industry into a low-margin business which led to the bankruptcy of most of the old major airlines.
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To maximize the economic pie, government should
A) provide only those public goods whose benefits outweigh their costs. B) provide no public goods. C) provide only those public goods whose costs outweigh their benefits. D) provide all possible pure public goods.
In the case of errors-in-variables bias,
A) maximum likelihood estimation must be used. B) the OLS estimator is consistent if the variance in the unobservable variable is relatively large compared to variance in the measurement error. C) the OLS estimator is consistent, but no longer unbiased in small samples. D) binary variables should not be used as independent variables.