After a number of acquisitions, Air American controls 75 percent of the U.S. market. It has been charged with “monopolizing” the U.S. air markets by the Justice Department. In its defense, the airline would want to introduce evidence that
A. cross elasticities for air and rail travel were very high.
B. income elasticities for air and rail travel were very high.
C. price elasticity for air, rail, and auto travel were negative.
D. management always considered the public interest when setting prices.
Answer: A
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The more narrowly defined a good is, the more elastic the demand for the good will tend to be, ceteris paribus.
Indicate whether the statement is true or false.
Which of the following formulas is correct?
A) Net investment = gross investment + capital B) Net investment = gross investment - saving C) Net investment = gross investment - wealth D) Net investment = gross investment - depreciation E) Net investment = gross investment + depreciation
U.S. income data over the last 75 years suggests that the distribution of income
a. has gradually become more equal over the entire time period. b. has gradually become less equal over the entire time period. c. gradually became less equal until about 1970, then became more equal from 1970 to 2011. d. gradually became more equal until about 1970, then became less equal from 1970 to 2011.
Below are pairs of GDP growth rates and unemployment rates. Economists would be shocked to see most of these pairs in the U.S. Which pair of GDP growth rates and unemployment rates is realistic?
a. 10 percent, 1 percent b. 2 percent, 12 percent c. -1 percent, 8 percent d. -2 percent, 2 percent