Gasoline and Bicycles Are Substitutes in Consumption

question 63

Multiple Choice

Gasoline and bicycles are substitutes in consumption. Suppose we increase the federal gasoline tax to $1 per gallon. Initially, the gasoline price rises due to the tax, and the demand curve for bicycles shifts rightward because these goods are substitutes. What are the secondary changes that result from the gasoline tax as these markets adjust to a new general equilibrium?

• A) Bicycle price rises, demand for gasoline shift s leftward.
• B) Bicycle price rises, demand for gasoline shifts rightward.
• C) Bicycle price declines, demand for gasoline shifts leftward.
• D) Bicycle price declines, demand for gasoline shifts rightward.

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Definitions:

Oregon Vocational Interest Scales

A psychometric instrument designed to assess an individual's vocational interests across various occupational fields.

Erudition

Gaining knowledge on many topics.

Knowledge

Information, understanding, and skills that individuals acquire through experience, education, or training.

Investigative Dimension

A characteristic or aspect pertaining to the systematic examination or exploration of subjects, often related to one's interests in solving problems or understanding phenomena.