Gasoline and Bicycles Are Substitutes in Consumption

question 19

Multiple Choice

Gasoline and bicycles are substitutes in consumption. Suppose we increase the federal gasoline tax to $1 per gallon. What are the initial changes that result from the tax as these markets adjust to a new general equilibrium?

• A) Gasoline price rises, demand for bicycles shift s leftward.
• B) Gasoline price rises, demand for bicycles shifts rightward.
• C) Gasoline price rises, move downward along bicycle demand curve.
• D) Gasoline price rises, move upward along bicycle demand curve.

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Definitions:

Abraham Maslow

A psychologist known for creating Maslow's hierarchy of needs, a theory of psychological health predicated on fulfilling innate human needs.

Cognitive Psychology

A branch of psychology focused on the study of mental processes such as perception, memory, thought, and problem-solving.

Mental Processes

The internal, covert activities of the mind, such as thinking, feeling, and problem-solving, that are not directly observable.

Behavior

The actions or reactions of an object or organism, usually in relation to the environment or context.