Suppose You Are Advising the Government on Changes in the Gasoline

question 80

Multiple Choice

Suppose you are advising the government on changes in the gasoline market.The current price is $1.00 per litre and the quantity demanded is 2.5 million litres per day.Short-run price elasticity of demand is constant at 0.3.If the supply of gasoline is reduced so that the price rises to $1.50 per litre,then quantity demanded is predicted to fall in the short run by

• A)15%,and total expenditure will rise.
• B)15%,and total expenditure will fall.
• C)50%,and total expenditure will fall.
• D)12%,and total expenditure will rise.
• E)13.3%,and total expenditure will rise.

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Definitions:

Communication Researcher

A person specializing in the study of communication processes, who may employ various methodologies to examine communication practices.

Empiricism

A theory in epistemology that states knowledge comes only or primarily from sensory experience.

Observations

The act of monitoring or recording systematically selected variables or behaviors in research to gather data.

Assumption

A statement taken for granted or accepted as true without proof, used as a basis for reasoning or argument.