Suppose in this 2022 you manage the travel department for a largecorporation and your sales force makes heavy use of air travel to call on customers. The presidentof the corporation wants you to reduce travel expenditures next year in 2023. The extent to whichyou will need to curb air travel next year will depend on what happens to the price of air travel. Ifairfares fall in 2022, you can satisfy the wants of both the president, who wants expenditures cut,and the sales personnel, who would be hurt by travel restrictions. Clearly, you need to predict whatwill happen to airfares. You have recently read in the dailies about the following two events thatyou expect will affect the airline industry in 2023:1. A number of new, small airlines have recently entered the industry and others are expected toenter next year.2. Broadband Internet videoconferencing is becoming a popular, cost-effective alternative tobusiness travel for many U.S. corporations. The trend is expected to accelerate next year astelecommunications firms begin cutting prices on teleconferencing rates.With graphic support, carefully analyze how these events would affect the price of air travel in2023. 6 Mark

What did Congress do in 1995 to reduce overregulation?Multiple ChoiceIt passed the Airlines Deregulation Act, which eliminated government-set airfares and the requirement that airlines provide service to smaller-sized cities.It enacted legislation that prohibits administrators in some instances from issuing a regulation unless they can show that its benefits outweigh its costs.It cut the budget of the Food and Drug Administration.It restricted the president's ability to directly request administrative regulations from agency heads.It cut funding for regulatory agencies like the EPA and Securities and Exchange Commission.

Consider the market for airline tickets. Which of the following events will NOT generate deadweight loss?A. A Recession causing incomes to fall.B. A quota on the number of airline tickets allowed to be sold every year.C. A price ceiling set below the equilibrium priceD. An excise tax put on airline tickets

Assume an economy has only two polluters, one airline and one power plant. Last year, theairline emitted 4000 tons of CO2 and the power plant emitted 6000 tons of CO2. It is predictedthat the airline and the power plant’s CO2 emissions will not change next year if no emissionmitigation policy is implemented. The regulator will implement ETS next year. The schemewill take the last year as the baseline year and will grandfather all the allowances according tothe baseline emissions. The policy target is to cut 10% of CO2 emission. The marginalabatement cost (MAC) of the airline is $60 per ton of CO2 and the MAC of the power plant is$40 per ton.(a) How many allowances will be allocated to the airline and the power plant respectively

Assume an economy has only two polluters, one airline and one power plant. Last year, theairline emitted 4000 tons of CO2 and the power plant emitted 6000 tons of CO2. It is predictedthat the airline and the power plant’s CO2 emissions will not change next year if no emissionmitigation policy is implemented. The regulator will implement ETS next year. The schemewill take the last year as the baseline year and will grandfather all the allowances according tothe baseline emissions. The policy target is to cut 10% of CO2 emission. The marginalabatement cost (MAC) of the airline is $60 per ton of CO2 and the MAC of the power plant is$40 per ton.(a) How many allowances will be allocated to the airline and the power plant respectively?(2 marks)(b) If the allowances can be traded and the market price of allowances is $50 per ton, whichpolluter will buy allowances, and which one will reduce emissions and sell allowances tothe other? How much will be the total abatement cost?

Consider the market for airline tickets. Which of the following events will NOT generate deadweight loss?Choice 1 of 4:A. Recession causing incomes to fall.Choice 2 of 4:B. A quota on the number of airline tickets allowed to be sold every year.Choice 3 of 4:C. Price ceiling set below the equilibrium priceChoice 4 of 4:D. Excise tax put on airline tickets