Question

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

Answer 1

Answer:

Increase, Increase

Explanation:

Normal goods experience a rise in demand if the consumer's income increases or economic conditions improve. Normal goods are sometimes referred to as necessary goods.

Jet fuel can be considered as input the cost of vocations.  An increase in jet fuel will result in a rise in the cost of vacations.  A rise in the cost of vacation leads to an increase in their equilibrium price.

If vacations are normal goods, an increase in people's income will increase their demand. Therefore, the equilibrium quantity of vacations will increase.