FPC Macroeconomics and Price Questions


What would be the effect of a 75 percent tax on lawsuit punitive awards that was proposed by then California governor Arnold Schwarzenegger in 2004 on:

The number of punitive awards. Demonstrate your answer using supply and demand curves. (You will post your graph as jpg. in your discussion post).
The number of pretrial settlements. 

Airlines and hotels have many frequent-flyer and frequent-visitor programs in which individuals who fly the airline or stay at the hotel receive bonuses that are the equivalent to discounts. 

Give two reasons why these companies have such programs rather than simply offering lower prices. 
Can you give other examples of such programs?
What is a likely reason why firms whose employees receive these benefits do not require their employees to give benefits to the firm?

American Airlines

company prices

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