7. The US government had price controls on airfare between states, but not within a state. Los
Angeles to San Francisco is a 338 mile flight, and Chicago to Minneapolis is 339. The flight
from Chicago to Minneapolis was about twice as expensive as the LA to San Francisco due to
the price controls. This is an example of a price
a. ceiling
b. floor
8. Draw on the following graph:
a. Supply and demand of tickets from Chicago to Minneapolis
b. The appropriate price control
c. The quantity consumed under the price controls
d. PS and CS under price controls
9. Following the abolishment of the price controls, it should be expected that prices
and quality (not quantity, quality) ______ of trans-state flights.
a. increased, increased
b. increased, decreased
c. decreased, increased
d. decreased, decreased