PART A. (10 pts) The following questions deal with the market for airline service. In column I, answer with the following key:

A: equilibrium price increases

B: equilibrium price decreases

In column II, answer with the following key:

A: equilibrium quantity increases

B: equilibrium quantity decreases

Col. I Col. II

__A___ __A__ 1. The population increases.

___A__ __B___ 2. The price of jet fuel increases (jet fuel is an input in providing airline service).

___A__ ___B__ 3. The number of airline companies decreases.

___A__ __A___ 4. The price of train tickets increases (assume train travel and air travel are substitutes).

___B__ _A___ 5. A new technology makes it cheaper to produce airline service.

__A___ __B__ 6. Taxes are increased on airline companies.

__A__ __B__ 7. A negative supply shock hits the airline market.

__B__ __B__ 8. Consumer tastes and preferences switch from wanting to fly to wanting to drive.

__A__ ___B__ 9. Consumers expect airline ticket prices to decrease in the future.

__B__ __B___ 10. Consumer incomes decrease (assume airline service is a normal product).