Suppose the Quantity of Gasoline Is Measured in Litres and the Price

question 64

Multiple Choice

Suppose the quantity of gasoline is measured in litres and the price of gasoline is measured in dollars.The price elasticity of demand is 0.67.If the price of gasoline is then measured in cents rather than in dollars,the price elasticity of demand would be

• A)6.7.
• B)67.0.
• C)0.67.
• D)0.0067.
• E)negative.

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Definitions:

Tariffs

Taxes imposed on imported goods and services, intended to raise their price and protect domestic industries.

Trade Barriers

Restrictions imposed by a government on the importation or exportation of goods to protect domestic industries.

Mutual Economic Growth

a situation in which multiple parties or countries experience simultaneous increases in economic development and prosperity through cooperation or beneficial policies.

Favourable Trade And Customs Laws

Legislation and regulations that reduce barriers to trade, such as tariffs and quotas, making it easier for goods and services to move across borders.