Suppose You Are Advising the Government on Changes in the Gasoline

question 99

Multiple Choice

Suppose you are advising the government on changes in the gasoline market.The current price is $1.00 per litre and the long-run price elasticity of demand is constant at 0.8.If a tax on gasoline causes the price to rise to $1.50 per litre,then quantity demanded is predicted to fall in the long run by

• A)12% and total expenditure will fall.
• B)24% and total expenditure will fall.
• C)32% and total expenditure will fall.
• D)24% and total expenditure will rise.
• E)50% and total expenditure will rise.

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Definitions:

Left Atrium

One of the four chambers of the heart, receiving oxygenated blood from the lungs and pumping it into the left ventricle.

Bicarbonate Ion

A negatively charged ion (HCO3-) that is a significant component of the blood buffer system, regulating pH balance.

Fetal Hemoglobin

A type of hemoglobin that is present in fetuses and newborn babies, offering higher oxygen affinity than adult hemoglobin.

Maternal Hemoglobin

The oxygen-carrying protein found in the red blood cells of a pregnant woman, crucial for both maternal and fetal health.