Assume That the Price Elasticity of Demand for Gasoline Is

question 55

Multiple Choice

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

• A)0.5 percent
• B)3.0 percent
• C)8.33 percent
• D)50 percent

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Definitions:

Economic Dependence

A condition where an individual, entity, or country relies significantly on another for financial support, resources, or economic well-being.

Political Considerations

Political considerations involve the influence of government policy, political climate, or legislative actions on decision-making processes.

Unconditional Cash Transfers

Direct payments given to individuals or households without any requirements for the receipt of the money, used to reduce poverty or inequality.

Cultural Obstacles

Barriers that stem from cultural differences and prevent or hinder progress in understanding, social integration, and economic development.