Question

Marginal Airlines. Maiginal Airines runs 10 fights per day at total coet of \( \$ 00,000 \), neluding \( 335,000 \mathrm{n} \). fored costs for akport fees and the reservation sysen and \( \$ 25,000 \

Answer 1

The question focuses on the opportunity costs and direct costs associated with heightened airline security measures since 9/11, which include longer waiting times and expenses on security personnel and equipment.

Step-by-step explanation:

The question pertains to the costs associated with airline security and the economic concept of opportunity costs. Increased security measures since September 11, 2001, have led to longer waiting times at airports, which represent a significant opportunity cost. The conservative estimate of this cost is calculated by assuming an extra 30 minutes per passenger at a rate of $20 per hour, which amounts to an opportunity cost of $8 billion per year for the U.S. air travelers. Additionally, direct costs for enhanced security like sky marshals, reinforced cockpit doors, and advanced screening technology can total upwards of $5.45 billion, reflecting the substantial investment post-9/11 in preventing similar events.

Answer 2

The concept of opportunity costs is significant in the airline industry, particularly considering the additional waiting time at airports post-9/11. Additional security measures have led to increased waiting times, valued at $20 per hour, leading to an opportunity cost of about $8 billion annually. Direct costs for safety improvements and competitive pricing strategies are also impactful factors.

Step-by-step explanation:

The concern raised touches on the concept of opportunity costs in the airline industry, particularly following a significant event that changed the security landscape—the September 11, 2001, terrorist attacks. Enhanced security measures such as more intensive screenings have led to passengers spending additional time at airports. Using the U.S. Department of Transportation data from 2015, if each passenger spends an extra 30 minutes at the airport, the opportunity cost for this waiting time—calculated by valuing time at $20 per hour for 800 million passengers—amounts to approximately $8 billion per year.

Moreover, there are direct costs associated with improvements in air travel safety post-9/11. The federal government considered options such as deploying sky marshals at an annual cost of $3 billion, retrofitting planes with reinforced cockpit doors for $450 million, and investing in advanced security equipment for $2 billion. Lastly, strategies utilized by large airlines to eliminate competition, such as predatory pricing against start-up airlines, can also profoundly impact the industry.