The Price Elasticity of Demand for Gasoline in the Short

question 101

Multiple Choice

The price elasticity of demand for gasoline in the short run has been estimated to be -0.1.If a war in the Middle East causes the price of oil (from which gasoline is made) to increase, how will that affect total expenditures on gasoline in the short run, all other things unchanged?

• A) demand will stay the same, but total expenditures will fall
• B) demand will decrease, but total expenditures will rise
• C) total expenditures will remain unchanged
• D) demand will not change, but total expenditures will rise

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Definitions:

Irritations

Mild forms of discomfort or annoyance, often triggered by specific environmental or psychological stimuli.

Frustrations

are feelings of dissatisfaction and discomfort arising from obstacles that prevent one from achieving goals or satisfying needs.

Cognitive Dissonance

The psychological discomfort experienced when holding two or more contradictory beliefs, ideas, or values at the same time.

Performance

The execution and completion of tasks or actions, often measured against preset standards of accuracy, speed, and efficiency.