If airfares to Europe were to increase, other things equal, an economist would predict that:
A)most people will not change their travel and vacation plans.
B)more individuals will choose to fly to Europe because now it is a more valuable experience.
C)some individuals will substitute toward other travel destinations.
D)airlines will make significantly greater profits.

Question

If airfares to Europe were to increase, other things equal, an economist would predict that:​
A)​most people will not change their travel and vacation plans.
B)​more individuals will choose to fly to Europe because now it is a more valuable experience.
C)​some individuals will substitute toward other travel destinations.
D)​airlines will make significantly greater profits.

Quizplus · Accepted Answer

An increase in airfare would make traveling to Europe relatively more expensive compared to other travel destinations. As a result, some individuals would likely substitute toward other travel destinations. Option A is incorrect as an increase in airfares would discourage some travelers from going to Europe. Option B is incorrect as it assumes that everyone values their travel experience the same way. Option D does not follow from the information given, as it is not clear how an increase in airfares would affect airlines' profits.

If Airfares to Europe Were to Increase, Other Things Equal