Question

here are four economic enigmas. - why do economy seats on airplanes cost different amounts? - why do people pay more for name - brand products when there are generic brands of the same product available for less? - why do police officers get paid so much less than professional baseball players? - why does a five - day disneyland pass cost only 2.5 times what a one - day pass costs? choose one of these economic enigmas, or think of one that you have observed in your own life. follow these steps to apply an economic way of thinking to help explain your enigma. what principles guide an economic way of thinking? economists have identified several principles that can help us understand how people make choices and how their decisions affect others. they include the following: - scarcity forces tradeoffs - benefits should outweigh costs - decisions are often made at the margin - incentives matter - trade makes people better off - markets coordinate trade better than anything or anyone else - decisions made today have consequences in the future 1. write your economic enigma. 2. now list any economic principles that help explain your enigma.

Explanation:

1. The selected enigma is about airline economy seat pricing, which stems from airlines using marginal decision-making and price discrimination to maximize revenue, while accounting for tradeoffs between filling seats and profit per seat.
2. The relevant principles explain how airlines make incremental pricing decisions, balance costs/benefits of different fares, and use incentives to attract different types of travelers.

Answer:

1. Why do economy seats on airplanes cost different amounts?
2. - decisions are often made at the margin

• benefits should outweigh costs
• incentives matter
• scarcity forces tradeoffs