If the Price of Gasoline in This Country Were Expected

question 75

Multiple Choice

If the price of gasoline in this country were expected to rise due to a permanent increase in the tax on gasoline, which of the following would you expect to happen?

• A) The demand for gasoline would become more elastic.
• B) The demand for gasoline would decrease as a result of the higher price.
• C) Producers will have less of an incentive to supply gasoline as a result of the higher taxes.
• D) The elasticity of demand will not change since gasoline is a necessity good.

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Definitions:

Social Interaction

Refers to the process by which individuals act and react in relation to others, involving communication, interpretation, and behavioral response.

Impression Management

The process through which individuals attempt to influence the perceptions of other people about a person, object, or event by regulating and controlling information in social interaction.

Prescriptive Norms

Social rules that dictate what behavior is expected or appropriate within a community or society.

Proscriptive Norms

Social rules that dictate what behaviors are forbidden or discouraged within a society or group.