Suppose there are 100 seats on a flight from Hong Kong to Seoul. The number of no-shows is normally distributed with mean 20 and
standard deviation 5. The price of an airline ticket is p. The cost per
bumped customer is c. Assume c > p. Choose all of the statements
that are true.

a. According to a new prediction from the marketing department, the
number of no-shows is indeed normally distributed with mean 20 andstandard deviation 10. In this case, the optimal overbooking level islower than that in the original scenario.

b. The airline should sell more than 120 tickets.

c. If the airline makes an arrangement with a partner airline, so that it canreduce the cost for bumped customers by half, then the optimaloverbooking level decreases.

d. If the price of the ticket increases, the optimal overbooking level
increases.

Why is efficiency an important economic goal?

The former chairman of the federal reserve, alan greenspan, used the term "irrational exuberance" in 1996 to describe the high levels of optimism among stock market investors at the time. stock market indexes such as the s& p composite price index were at an all-time high. some commentators believed that the fed should intervene to slow the expansion of the economy. why would central banks want to clamp down when the economy is growing? a. to block the formation of unsustainable speculative asset bubbles. b. to curtail excessive profits in the banking system. c. to prevent inflationary forces from gathering momentum. d. all of the above. e. a and c only.

1. which one of the following would be an example of a supply-side market failure? a. a gas station is slowly leaking diesel fuel from its underground tanks, and after the leak is discovered, the business immediately cleans up the pollution at its own expense. b. a gas station is slowly leaking diesel fuel from its underground tanks, but the state uses taxpayer money to clean up the pollution rather than requiring the business to pay. c. your business wants to attract repeat customers by putting on a customer-appreciation picnic at a public park, but you decide not to because you couldn't prevent noncustomers from consuming the food and entertainment you provided. d. everyone rushes to the local retail outlet at midnight on the day of the release of a new video game console, and the store runs out before everyone is able to buy one.