The amount of money paid to workers as wages is an example of fixed costs

Which of the following is a reason why airline yield management is an effective method to increase revenue?

A) because airlines have successfully induced customers to reveal their resources and preferences by offering them different versions of the product such as business class and coach plane tickets B) because airlines have a monopoly in long-distance carriage C) because a ticket is a contract to transport a specific person, and is not transferable D) because airlines have invested heavily in developing computer models that identify optimal pricing strategies in the various market segments

If the inflation rate is 3 percent and the nominal wage is frozen for one year, by how much will the real wage change?

a. It will decrease by about 3 percent. b. It will not change. c. It will increase by 3 percent. d. It will triple. e. We do not have enough information to determine this answer.