Jim Has Estimated Elasticity of Demand for Gasoline to Be

question 84

Multiple Choice

Jim has estimated elasticity of demand for gasoline to be -0.7 in the short-run and -1.8 in the long run. A decrease in taxes on gasoline would:

• A)​lower tax revenue in both the short and long run. 
• B)raise tax revenue in both the short and long run.
• C)raise tax revenue in the short run but lower tax revenue in the long run. 
• D)​lower tax revenue in the short run but raise tax revenue in the long run. 

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Definitions:

Happiness

A state of well-being and contentment, characterized by positive emotions ranging from contentment to intense joy.

Correlation

A statistical measure that indicates the extent to which two or more variables fluctuate together.

James-Lange Theory

A theory of emotion proposing that emotions result from the perception of bodily reactions to stimuli, suggesting that physiological arousal precedes the emotional experience.

Evolutionary Theory

A scientific theory that explains the diversity of life on Earth through mechanisms such as natural selection and genetic mutation over time.