If gas prices rose from $3 to $4 a gallon and gasoline consumption decreased by 50% Group of answer choices demand for gasoline is elastic. demand for gasoline is inelastic. total expenditures on gasoline would fall.

If gas prices rose from $3 to $4 a gallon and gasoline consumption decreased by 50% Group of answer choices demand for gasoline is elastic. demand for gasoline is inelastic. total expenditures on gasoline would fall.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter5: Income And Substitution Effects

Section: Chapter Questions

Problem 5.9P

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Question

If gas prices rose from $3 to $4 a gallon and gasoline consumption decreased by 50%

Group of answer choices

demand for gasoline is elastic.

demand for gasoline is inelastic.

total expenditures on gasoline would fall.

Question 2

The greater the price elasticty of driving

Group of answer choices

an increase in the price of gas would have a greater effect on traffic congestion

an increase in the price of gas would have no effect on traffic congestion

the smaller the decrease in traffic congestion when the price of gasoline rises.

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