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Mila [183]
3 years ago
9

When the economy suffers a downturn and the incomes of many people decrease, vacationers are more likely to take car trips than

to fly. Which statement provides one possible explanation for this phenomenon?
Business
2 answers:
klemol [59]3 years ago
6 0

Answer:incomes are decreasing and so is air travel, Air travel is normal good.The decrease in income results in more car trips, making it an interior good

Explanation:NORMAL GOOD:When a rise in income increases the demand for the good.

INFERIOR GOOD:When a rise in income decreases the the demand for the good.

inysia [295]3 years ago
3 0

Answer: Air travel is a normal good and vacation travel by car is an inferior good

Explanation: What is a normal good and what is an inferior good.

Normal goods are those goods for which the demand rises as consumer income rises. While inferior goods are goods whose demand increases when consumer income decreases.

This therefore means that the demand of inferior goods is inversely related to the income of the consumer.

From the question above, we can say that car trips are inferior goods while the air travel are normal goods.

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4 0
3 years ago
Read 2 more answers
Consider a portfolio of stocks X, Y, Z whose returns in various economic conditions are set forth below.
jeka57 [31]

Answer:

The expected return is 10.95%

Explanation:

CALCULATE THE EXPECTED RETURN OF X

State _____Probability __X_____Expected return

Boom ____ 0.25 ______22%  ___5.50%

Normal ___ 0.60 ______15%  ___ 9.00%

Recession _0.15 _______5% ___ <u>0.75%  </u>

Total ______________________<u>15.25%</u>

CALCULATE THE EXPECTED RETURN OF Y

State _____Probability __Y_____Expected return

Boom ____ 0.25 ______10%  ___ 2.50%

Normal ___ 0.60 ______9%  ____5.40%

Recession _0.15 _______8% ___ <u>1.20%  </u>

Total ______________________<u>9.10%</u>

Now calculate the weighted average return based on investment in each portfolio

Expected return = ( Expected return of Assets X x Weight of Asset X ) + ( Expected return of Assets Y x Weight of Asset Y )  

Expected return = ( 15.25% x $3000/$10000 ) + ( 9.10% x $7000/$10000 )  

Expected return = 4.575% + 6.370%

Expected return = 10.945%

Expected return = 10.95%

5 0
3 years ago
If you must apply for a loan, you should?
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First have good credit.
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3 years ago
When countries sell off state-owned enterprises and privatize them, it usually results in a(n)A. continuing drain on future natu
babymother [125]

Answer:

C. increase in modernization by new investors.

Explanation:

Privatization is the transfer of ownership of property or business owned by government to a private entity.

Privatization generates capital to be invested in strategic areas and help to reduce the continuing drain on future natural resources. The new private investors causes economic growth by modernizing the acquired property or business from the government.

5 0
3 years ago
On January 12, 2021, Jefferson Corporation purchased bonds of Rose Corporation for $52 million at par and classified the securit
sineoko [7]

Answer:

Transaction gain = $16 million

Explanation:

Given:

Purchase amount = $52 million

December 31, 2021, bonds value = $46 million

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Computation:

Using multi-step approach

Transaction gain = October 3, 2022, bonds sold - December 31, 2021, bonds value

Transaction gain = $62 million - $46 million

Transaction gain = $16 million

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3 years ago
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