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yuknam yuknam
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Posts: 357
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A week ago

Question 1.

What factors would make you more sensitive or less sensitive to price when purchasing gasoline?



Question 2.

Suppose the price of gasoline is $3.50 per gallon, the quantity of gasoline demanded is 150 billion gallons per year, the price elasticity of demand for gasoline is -0.06, and the federal government decides to increase the excise tax on gasoline by $1.00 per gallon, which increases the price of gasoline by $0.75 per gallon. What is the new equilibrium quantity of gasoline demanded after the tax is imposed?



109.72 billion gallons per year



127.25 billion gallons per year



148.27 billion gallons per year



161.61 billion gallons per year

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Niquegirl21!Niquegirl21!
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A week ago
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Answer 1

A number of factors are likely to affect your sensitivity to changes in gasoline prices, including your income level, whether you live in an area with good public transportation, and whether you live within walking distance of your school or job.



Answer 2

148.27 billion gallons per year

1

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