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:

Bankruptcy Proceedings

A legal process through which individuals or businesses unable to meet their debts can seek relief from some or all of their liabilities.

Transactions

The action of conducting business, trade, or an exchange between two or more parties.

Prejudgment

Making a decision or forming an opinion before having all the relevant facts or evidence.

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A legal solution available after a court has made a final decision in a case, allowing for the enforcement or modification of the judgment.