If the Demand for Gasoline Becomes More Elastic Over Time

question 56

Multiple Choice

If the demand for gasoline becomes more elastic over time,

• A)the demand curve will shift out.
• B)the demand curve will become flatter.
• C)other things being equal, the equilibrium price of gasoline must fall.
• D)other things being equal, the equilibrium quantity of gasoline must fall.

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Definitions:

Real Wage

The purchasing power of an individual's earnings, taking into account the effects of inflation.

Aggregate Supply

The cumulative supply of products and services planned for sale by firms in an economy within a specific time period.

Cyclical Unemployment

Unemployment caused by a downturn in the economic cycle, such as a recession, which reduces the demand for goods and services.

Structural Unemployment

Unemployment caused by a mismatch between workers' skills and the requirements of available jobs, often due to technological or economic changes.