There is an increase in both consumer income and in the price of jet fuel,an important resource used to produce air travel.If air travel is a normal good,how will these changes influence the price and quantity purchased of air travel? The price of air travel will (be)____ and quantity purchased will (be)____.
A) indeterminate; decrease
B) increase; indeterminate
C) decrease; indeterminate
D) indeterminate; increase

Question

Quizplus · Accepted Answer

An increase in consumer income will increase demand for air travel (a normal good), pushing prices up. An increase in the price of jet fuel will decrease supply, also pushing prices up. The effect on quantity is indeterminate because the increase in demand increases quantity, while the decrease in supply decreases quantity.

There Is an Increase in Both Consumer Income and in the Price