An Economic Theory Claims That a Rise in Gasoline Prices

question 115

Multiple Choice

An economic theory claims that a rise in gasoline prices will cause gasoline purchases to fall, Ceteris paribus. The phrase "Ceteris paribus" means that:

• A) other relevant factors like consumer incomes must be held constant.
• B) the gasoline prices must first be adjusted for inflation.
• C) the theory is widely accepted but cannot be accurately tested.
• D) consumers' need for gasoline remains the same regardless of the price.

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