If the Cross-Price Elasticity of Demand for SUVs with Respect

question 46

Multiple Choice

If the cross-price elasticity of demand for SUVs with respect to the price of gasoline is -0.10,and gasoline prices rise by 18 percent,then SUV sales should,ceteris paribus,

• A)Fall by 1.8 percent.
• B)Fall by 18 percent.
• C)Rise by 1.8 percent.

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Definitions:

Tariffs

Tariffs are taxes imposed by a government on imported goods and services to regulate trade, protect domestic industries, or generate revenue.