1. For question (1), answer two of the options below:

a) Americans have become heavily dependent on air travel - especially for long-distance travel (e.g., from the east coast to the west coast). Since airline pilots play a crucial role in such travel, dramatic increases in wages for pilots will not impact the number of pilots hired by airlines. Do you agree with this statement? Explain.

b) Predict how each of the following events will raise or lower the equilibrium wage and quantity of coal miners in West Virginia. (Consider the effects of changes in supply and/or demand).

*The price of oil rises.

*New coal-mining equipment is invented that is cheap and requires few workers to run.

*Several major companies that do not mine coal open factories in West Virginia, offering a lot of well-paid jobs.

*Government imposes costly new regulations to make coal-mining a safer job.

c) Is income distributed "fairly" in the U.S.? Provide a rationale with relevant data.

d) Should government (federal and/or state) play a role in redistributing income? Elucidate.