If USConsumers Bought More Gasoline in 2008 (When Prices Averaged $3

question 9

Multiple Choice

If U.S.consumers bought more gasoline in 2008 (when prices averaged $3.22 per gallon) than they did in 1970 (when prices averaged $0.30 per gallon) , does that mean that people buy more gasoline at higher prices?

• A)No, because 1970 prices are ancient history compared to 2001 prices.
• B)No, because there is too little information provided about inflation, consumer income and other variables to make an appropriate comparison.
• C)Yes, because gas is a necessity that is in short supply. Consumers are always willing to buy more gasoline-even at higher prices.
• D)Yes, because gasoline is a luxury good that consumers willingly purchase - even at higher prices.