Suppose That a 5% Increase in the Price of Gasoline

question 39

Multiple Choice

Suppose that a 5% increase in the price of gasoline leads to a 15% decrease in the quantity demanded of SUVs.The cross-price elasticity of demand for SUVs is:

• A)3.0.
• B)3.3.
• C).33.
• D)33.

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Definitions:

Medical Insurance

Health coverage that typically pays for medical, surgical, prescription drug, and sometimes dental expenses incurred by the insured.

Health Risks

Potential factors or behaviors that can lead to disease, injury, or other health problems.

Moral Hazard

A situation where one party engages in risky behavior knowing that it is protected against the risk because another party will incur the cost.

U.S. Population

The total number of residents living in the United States, as measured by census and population estimates.