Southwest Airlines Operates Five Flights Daily Between Chicago and Phoenix

question 40

Multiple Choice

Southwest Airlines operates five flights daily between Chicago and Phoenix during the winter.One flight leaves Phoenix at 12:10 p.m.The plane,a Boeing 737,has a capacity of 120 passengers.During the past month,the flight has averaged only 24 passengers,a load factor of 20 percent.Once the plane takes off,the empty seats generate no revenue for the airline for that flight.What unique aspect of services does this situation describe?

• A)incongruity
• B)intangibility
• C)inconsistency
• D)inseparability
• E)idle production capacity

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Definitions:

Volcker Disinflation

A policy period in the early 1980s during which Federal Reserve Chairman Paul Volcker significantly raised interest rates to reduce inflation.

Money Growth

The increase in the amount of money in circulation within an economy, which can influence inflation and economic activity.

Aggregate-Demand Curve

A visual depiction illustrating the connection between the total economy's price level and the aggregate demand for products and services at this specific price point.

Interest-Rate Effect

The change in spending and borrowing behavior in an economy due to a change in interest rates, often influencing total demand.