Some Environmental Groups Are on Record Suggesting That the Price

question 101

Multiple Choice

Some environmental groups are on record suggesting that the price of gasoline should be much higher than it was in the early 1990s.Why might they say this?

• A) They own stock in oil companies.
• B) They anticipate that the longer the price is high, the more elastic the response by consumers will be.
• C) They anticipate that the longer the price is high, the less elastic the response by consumers will be.
• D) They anticipate that higher prices will reduce the price elasticity of supply of oil.

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Definitions:

Semi-Annually

Occurring twice a year; typically referring to the frequency at which interest is paid or calculated.

Future Value

The amount of money an investment is expected to grow to over a period of time, assuming a specific interest rate.

Rates of Return

The positive or negative financial outcome of an investment over an agreed-upon period, expressed as a percent of the investment's initial outlay.

Present Value

The now value of a sum of money to be received in the future or a series of financial inflows, accounting for a specific return rate.