Assume That the Price Elasticity of Demand for Petrol Is

question 17

Multiple Choice

Assume that the price elasticity of demand for petrol is -0.06.If the government tax causes the price of petrol to increase by 50 per cent, what will be the decrease in the quantity of petrol demanded?

• A)0)5 per cent
• B)3)0 per cent
• C)8)33 per cent
• D)50 per cent

---

Definitions:

National Saving

The total amount of savings generated within a country, comprising both private savings and the government's budget surplus.

Domestic Investment

Refers to the total amount of money invested in resources within a country's own borders, including investments in businesses, infrastructure, and real estate by both public and private sectors.

Exchange Rate

The amount one currency is valued when converted into another currency.

Pesos

The currency used in several countries, including Mexico and the Philippines, often symbolized by "$".