If the Price of Gasoline Increased by 5 % and Consumers

question 103

Multiple Choice

If the price of gasoline increased by 5 % and consumers responded by purchasing 1 % less gasoline, the absolute value of price elasticity of demand for gasoline would equal

• A) 0.1.
• B) 0.5.
• C) 1.5.
• D) 0.2.

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Definitions:

Expected Value

Expected value is a concept in probability that calculates the average outcome when the future involves scenarios that may or may not happen.

Moving Average Forecast

A method used in time series analysis to smooth out short-term fluctuations and highlight longer-term trends or cycles.

Observable Trend

A pattern, change, or movement in data or events that can be detected and analyzed through observation.

Seasonality

Refers to periodic fluctuations in business or data that recur in a predictable pattern based on the time of year.