If airfares to Europe were to increase, an economist would predict that:

Question

Quizplus · Accepted Answer

When the price of airfare increases, it becomes relatively more expensive to travel to Europe. As a result, some individuals may choose to substitute towards other travel destinations that are now relatively more affordable. This could include domestic travel or travel to other international destinations. Therefore, an economist would predict that many individuals will substitute towards other travel destinations. Option A is unlikely as people often adjust their travel plans based on cost. Option B is also unlikely as an increase in airfares does not necessarily make the experience of traveling to Europe more valuable. Option D may or may not be true, as it is dependent on the overall demand for travel to Europe and the extent to which airlines pass on the increased costs of airfare to consumers.

If Airfares to Europe Were to Increase, an Economist Would