If a union successfully negotiates for higher wages and benefits for airline pilots, what impact would this have on supply and demand in the market for passenger airline travel, assuming no other changes take place in the market?
What will be an ideal response?
An increase in wages and benefits will shift the supply curve to the left, but will not shift the demand curve. This will increase the equilibrium price and decrease the equilibrium quantity in the market for passenger airline service.
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Which of the following is a characteristic of a perfectly competitive market?
a. a few large firms b. firms producing specialized products in order to attract consumers c. each individual firm having some control over the market price d. a large number of small firms
Unconventional monetary policy tools include all but:
A. forward guidance. B. reserve requirement. C. targeted asset purchases. D. quantitative easing.
During a severe recession, the government decides to lower its tax rates to give consumers relief, and allow them to pay less in taxes. This is an example of:
A. an automatic stabilizer. B. expansionary fiscal policy. C. contractionary fiscal policy. D. discretionary fiscal policy.
Suppose that your neighbor plays a stereo very loudly, which keeps you from sleeping. This common property problem can be solved through voluntary exchange as long as?