The threat of a new $27,500 fine for keeping passengers on the tarmac for more than 3
hours will cause the inefficiency of raising prices on passenger tickets. How will
commercial airlines respond to the threat of new $27,500 fines for keeping passengers
on the tarmac for more than 3 hours? What inefficiency will this create?
The airlines will react in a rapid manner to prevent these fines from occurring.
Ways that the airlines will do this is
1. Making sure they have a sufficient amount of employees to function at a
steady pace. Without enough employees, you will have other employees
overworked trying to keep up with the amount of work that is given to them. A
low number of employees means the process will be slow when the airlines are
operating. Employees are needed to make sure baggage gets on the plane,
planes are maintained and ready for take off, etc.
2. They will create more flights to get passengers going. By creating more flights,
they don't have to constantly worry about passengers keeping the plane from
taking off and giving the pilot and employees more time to explain procedures
and get the plane going (loading up passengers, loading up large amounts of
luggage below, instructing passengers of rules etc)
This will create the inefficiency of prices going up as airlines are going to need more money to
maintain planes and possibly purchase more. This will also create the inefficiency of more
planes up in the air causing congestion in the air for others.
I recently sold my used car. If no new production occurred for this transaction, how
could it have created value?
The buyer created value as the purchase of a vehicle was valued more to the buyer than the
seller. The seller possibly was not using the vehicle and it was just sitting there having no value
to the seller. The transaction created value to the buyer by giving the buyer a way of
transportation that he valued. The buyer may have been finding alternative ways to transport
and now he may not need to pay services for his transportation as the buyer now has
purchased a car.
You were able to purchase two tickets to an upcoming concert for $100 a piece when
the concert was first announced three months ago. Recently, you saw that StubHub was
listing similar seats for $225 apiece. What does it cost you to attend the concert?
It will cost you $225 a piece to attend the concert because you could have sold your experience
for that price instead of $100 a piece like you originally purchased it for.