Your roommate remarks that it is strange that a flight from New York to Chicago cost more than flight from New York to Orlando, since New York is closer to Chicago than Orlando. What is your roommate assuming about the relationship between distance and price? How do you explain these prices?
In March 2002 the retail of gasoline was 1.19 per galon - exactly the same as it was in August 1990. Yet, total gasoline production and consumption rose. Use a well labeled supply and demand graph to explain how this could happen.