The Demand for Gasoline Is More Elastic in the Long

question 43

Multiple Choice

The demand for gasoline is more elastic in the long run than in the short run because

• A)other prices are more likely to change in the long run.
• B)incomes tend to rise over time.
• C)people can buy new cars in the long run.
• D)cars have become more expensive over time.

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Definitions:

Indifference Curve

An indifference curve represents a combination of two goods between which a consumer is indifferent, showing equal utility or satisfaction levels.

Absolute Values

A number's distance from zero on the number line, disregarding its direction; always a non-negative value.

Favorite Bundle

The combination of goods or services that maximizes an individual's utility given their budget constraints.

Convex Preferences

A consumer preference pattern indicating a desire for mixed bundles of goods over extreme bundles, illustrating a preference for diversification.