The Price Elasticity of Demand for Gasoline in the Short

question 85

Essay

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 equal?
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 much, but total expenditures will rise.

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Definitions:

Traits

Enduring characteristics or qualities that define an individual's behavior across various situations.

Individual Fitness

In biology, it refers to an organism's ability to pass its genes to the next generation, often measured by reproductive success.

Situational Constraints

External factors present in the environment that limit or shape an individual's behavior or choices.

Survival

Living longer.