If the demand for air travel were to change so that business travelers and vacationers have the same price elasticity of demand for air travel,
A) airlines would charge the same price to each type of flyer.
B) airlines would still charge business flyers a higher fare since the traveler's employer pays anyway.
C) airlines would be driven out of business.
D) airlines would counter by charging vacationers a higher fare.
A
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The WTO and GATT promote trade by
A) reducing tariffs. B) reducing agricultural subsidies. C) eliminating quotas. D) all of the above.
Suppose the government imposes a price ceiling on gasoline that is less than the equilibrium price. As a result
A) the price of gasoline rises to the equilibrium price. B) there is incentive for buyers to undertake search activity. C) the supply of gasoline will increase and the supply curve will shift rightward. D) the demand for gasoline will decrease and the demand curve will shift leftward.