Each of the following events occurs (one at a time) in the market for air travel.

a. airfares tumble, while long distance bus fares dont change.

b. the price of jet fuel rises.

c. airlines boost the number of flights each day.

d. people expect airfares to increase next summer.

e. a severe winter in ny induces more people to vacation in florida.

f. with no snow in the rockies, fewer people travel to the ski slopes.

g. the price of train travel falls.

h. the of a pound of air cargo falls.

only one of the following statements about the market for air travel is true. which one?

1. events b, c, and h change the qty. supplied but do not change supply.

2. event c increases supply.

3. event f has no effect on demand.

4. event c decreases demand.

5. event e increases supply.

6. event a changes both demand and supply.

7. events d, e, f, and g change the qty. demanded but do not change demand and event a changes demand.

Self-interest achieve society’s economic goals because producers know which goods consumers want the most. as consumers and producers exercise their freedom to act in their own self-interest, markets will produce the desired goods at the lowest possible cost. consumers and producers both operate based on society’s economic goals. consumers know which goods can be produced at the lowest cost. there is a wide variety of desired goods and services in a market system because producers determine what to produce. consumers change their minds frequently. there is always a need to produce something new and improved. individual wants are diverse. what is produced is ultimately determined by consumers, because if the goods offered are not what consumers want, consumers will not buy them. producers, because they are driven by profits. producers, because they determine what to produce. consumers, because they participate in marketing surveys.

Pennewell publishing inc. (pp) is a zero growth company. it currently has zero debt and its earnings before interest and taxes (ebit) are $80,000. pp's current cost of equity is 10%, and its tax rate is 40%. the firm has 10,000 shares of common stock outstanding selling at a price per share of $48.00. refer to the data for pennewell publishing inc. (pp). pp is considering changing its capital structure to one with 30% debt and 70% equity, based on market values. the debt would have an interest rate of 8%. the new funds would be used to repurchase stock. it is estimated that the increase in risk resulting from the added leverage would cause the required rate of return on equity to rise to 12%. if this plan were carried out, what would be pp's new value of operations? a. $484,359 b. $521,173 c. $584,653 d. $560,748 e. $487,805

Apopular low-cost airline, parson corp., has gone out of business. although the service and price provided by the airline was what customers wanted, the larger airlines were able to drive the low-cost airline out of business through an aggressive price war. which component of the competitive environment does this illustrate? a) threat of new entrants b)competitors c) economic factors d) customers d) regulators