Darla is surprised to find that the quality of in-flight service remains much the same despite a steep hike in air-fares recently. What could be wrong in her assumption that a higher price naturally translates into better quality?
The fact that two variables might be related does not necessarily mean that one causes the other to occur. Darla could be ignoring other variables involved in this scenario. Increase in fares might have been necessitated by factors such as increase in aviation fuel prices, margin pressures etc.
You might also like to view...
The period since the Industrial Revolution has been extraordinary because despite unprecedented:
A. Population growth, there has been a substantial increase in the standard of living in industrialized nations B. Population growth, there has been a substantial decrease in the productivity in industrialized nations C. Declines in economic efficiency, there has been a rise in the standard of living in industrialized nations D. Declines in economic efficiency, there has been a rise in population growth in industrialized nations
Suppose Canada has a population of 30 million people and a labor force participation rate of 2/3. Furthermore, suppose the natural rate of unemployment in Canada is 7%. If the current number of unemployed people is 1.4 million people, what can we conclude about Canada's economy?
A. The unemployment rate is above the natural rate of unemployment. B. The unemployment rate is below the natural rate of unemployment. C. There is cyclical unemployment present in the economy. D. There is no cyclical unemployment present in the economy.