Author Question: If pilots and flight attendants agree to wage and benefit reductions in the wake of the financial ... (Read 118 times)

frankwu · **on:** Jun 29, 2018

If pilots and flight attendants agree to wage and benefit reductions in the wake of the financial difficulties in the airline industry, what impact would this have on the supply and demand in the market for airline service, assuming no other changes

take place in this market?

Question 2

Refer to Figure 2-2. Suppose Vidalia is currently producing 20 dozen orchids per period. How many roses is it also producing, assuming that resources are fully utilized?

A) 30 dozen roses B) 50 dozen roses C) 100 dozen roses D) 150 dozen roses

flexer1n1 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

A reduction of wages and benefits will shift the supply curve to the right, but will not shift the demand curve. This will decrease the equilibrium price and increase the equilibrium quantity in the market for airline service.

Answer to Question 2

D