Question

Vacations by plane are a normal good and people's incomes rise. At the same time, the price of jet fuel rises. The and the equilibrium quantity of vacation flights--------------

equilibrium price of a vacation flight----------------
might rise, fall, or not change; increases
-rises; might increase,
- decrease, or not change
-falls; decreases
-rises; increases

Answer 1

An increase in the price of jet fuel would lead to a decrease in the cost of air travel, resulting in a lower equilibrium price and higher equilibrium quantity of vacation flights.

Step-by-step explanation:

According to the four-step analysis, an increase in the price of jet fuel would affect the supply of air travel. The increase in jet fuel price would lead to a decrease in the cost of air travel, resulting in a downward or rightward shift in the supply curve.

This shift would cause a movement down the demand curve, lowering the equilibrium price of air travel and increasing the equilibrium quantity.