If the Price Elasticity of Demand for Gasoline Equals 0

question 221

Multiple Choice

If the price elasticity of demand for gasoline equals 0.3,then an increase in the price of a gallon of gasoline from $3.70 to $3.90

• A) decreases total revenue.
• B) increases total revenue.
• C) leads to no change in total revenue.
• D) makes the demand for gasoline elastic.
• E) Both answers B and D are correct.

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Definitions:

International Finance

The study and management of financial transactions and investments that cross national borders, including foreign exchange markets and international banking.

Trade Restrictions

Measures implemented by governments to regulate international trade, including tariffs, quotas, and import bans, aimed at protecting domestic industries.

Gold Standard

A financial structure in which gold directly determines the value of a country's paper currency.

Tariffs

Taxes imposed by a government on goods and services imported from other countries, used to restrict trade and raise government revenue.