Suppose You Are Advising the Government on Changes in the Gasoline

question 1

Multiple Choice

Suppose you are advising the government on changes in the gasoline market. The current price is
$1.00 per litre and the quantity demanded is 2.5 million litres per day. Short- run price elasticity of demand is constant at 0.3. If the supply of gasoline is reduced so that the price rises to $1.50 per litre, then quantity demanded is predicted to fall in the short run by

• A) 13.3 percent, and total expenditure will rise.
• B) 50 percent , and total expenditure will fall.
• C) 15 percent, and total expenditure will fall.
• D) 12 percent, and total expenditure will rise.
• E) 15 percent, and total expenditure will rise.

---

Definitions:

Livermore Fire Department

A specific municipal organization responsible for fighting fires, providing emergency medical services, and handling other emergencies in Livermore.

City Historians

Individuals specializing in the history of specific cities, often focusing on urban development, culture, and significant events.

Past Participle

A grammatical form used to indicate a completed action or condition, typically ending in -ed, -d, or -n in English.

Guinness Book

A record book that documents world records of human achievements as well as extreme natural events.