Homework Answers
a) The price elasticity of demand in the short run will be inelastic because in the short run, people have fewer alternatives and time to change their demand for the good so the elasticity would be -0.5
b) E = percentage change in demand/percentage change in price
so, -0.5 = -20/percentage change in price
Percentage change in price = -20*-0.5 = 40%
so,the price will increase by 40% to 3.50+40% of 3.50 = $4.9
Add Answer to:
13. a. Would you expect the price elasticity of demand for gasoline to be -0.5 or...
Suppose that the long-run price elasticity of demand for gasoline is 0.40. Assume that the price ...
Suppose that the long-run price elasticity of demand for gasoline is 0.40. Assume that the price of gasoline is currently $4.00 per gallon, the quantity of gasoline is 140 billion gallons per year, and the federal government decides to increase the excise tax on gasoline by $1.00 per gallon. Suppose that in the long run the price of gasoline increases by $0.70 per gallon after the $1.00 excise tax is a. Using the midpoint formula, after the tax is imposed,...
Suppose that the long-run price elasticity of demand for gasoline is -0.45. Assume that the price...
Suppose that the long-run price elasticity of demand for gasoline is -0.45. Assume that the price of gasoline is currently $4.00 per gallon, the quantity of gasoline is 140 billion gallons per year, and the federal government decides to increase the excise tax on gasoline by $1.00 per gallon. Suppose that in the long run the price of gasoline increases by $0.60 per gallon after the S1.00 excise tax is imposed. a. Using the midpoint formula, after the tax is...
Suppose that the long-run price elasticity of demand for gasoline is 0.45. Assume that the price...
Suppose that the long-run price elasticity of demand for gasoline is 0.45. Assume that the price of gasoline is currently $4.00 per gallon, the quantity of gasoline is 140 billion gallons per year, and the federal government decides to increase the excise tax on gasoline by $1.00 per gallon. Suppose that in the long run the price of gasoline increases by $0.60 per gallon after the $1.00 excise tax is imposec. a. Using the midpoint formula, after the tax is...
QUESTION 10 The price elasticity of demand for gasoline is -0.25. If we expect the price...
QUESTION 10 The price elasticity of demand for gasoline is -0.25. If we expect the price of gasoline to increase by 8 percent, what is the expected change in the quantity of gasoline demanded? A. Quantity declines by 2 percent B. Quantity declines by 8 percent C. Quantity increases by 2 percent D. Quantity declines by 4 percent QUESTION 11 The income elasticity of demand for bananas is -0.1. Is this good normal or inferior? A. Normal B. Neither normal...
1. a) Assume the long run elasticity of demand for gasoline is -0.2 and start with...
1. a) Assume the long run elasticity of demand for gasoline is -0.2 and start with the current California price of gasoline of $4.05 per gallon. How much would we need to increase the price in order to cut gasoline use in half in the long run? b) Explain in a few sentences why you would expect the short run effect of the tax to be much less. c) Suppose the income elasticity of demand for gasoline is 0.95. How...
QUESTION 1 Suppose the short-run elasticity of demand for gasoline in the US retail market is -0.5, and the long-run e...
QUESTION 1 Suppose the short-run elasticity of demand for gasoline in the US retail market is -0.5, and the long-run elasticity of demand in the same market is -0.8. What is the impact of an increase in the US federal gasoline tax? A. Increase tax revenue in the short run and decrease tax revenue in the long run B. Decrease tax revenue in both short run and long run C. Increase tax revenue in both short run and long run...
Suppose the demand for gasoline in the United States is Q = 500.8 - 7.8P +...
Suppose the demand for gasoline in the United States is Q = 500.8 - 7.8P + 0.027Y - 19.6MPG, where Q is annual U.S. gasoline consumption in millions of gallons per day, P is the retail price of gasoline in $/gallon, Y is real disposable income in billions of 2012 dollars, and MPG is the fleet efficiency in miles per gallon. Assume in 2015 P = 2.50, Y = 14600, and MPG = 24.7. Note that MPG is the long-run...
The price elasticity of demand for gasoline is likely to be higher in the long run...
The price elasticity of demand for gasoline is likely to be higher in the long run than in the short run. False True
Suppose that the price elasticity of demand for heating oil is 0.2. If the price of...
Suppose that the price elasticity of demand for heating oil is 0.2. If the price of heating oil rises from $1.80 to $2.20 per gallon, what will happen to the quantity of heating oil demanded in the short-run?
In the long run, the tax reduces the consumption of gasoline by _____ billion gallons per...
In the long run, the tax reduces the consumption of gasoline
by _____ billion gallons per year.
(Enter your response rounded to two decimal places.)
b. The amount of tax revenue the federal government recieves
from the tax is $_____ billion.
(Enter your response rounded to two decimal places.)
c. Compared to the short-run effect of an increase in the
excise tax on gasoline, the long-run effect of an increase in the
excise tax has a _____ effect on the...
Suppose that the long-run price elasticity of demand for gasoline is 0.40. Assume that the price of gasoline is currently $4.00 per gallon, the quantity of gasoline is 140 billion gallons per year, and the federal government decides to increase the excise tax on gasoline by $1.00 per gallon. Suppose that in the long run the price of gasoline increases by $0.70 per gallon after the $1.00 excise tax is a. Using the midpoint formula, after the tax is imposed,...
Suppose that the long-run price elasticity of demand for gasoline is -0.45. Assume that the price of gasoline is currently $4.00 per gallon, the quantity of gasoline is 140 billion gallons per year, and the federal government decides to increase the excise tax on gasoline by $1.00 per gallon. Suppose that in the long run the price of gasoline increases by $0.60 per gallon after the S1.00 excise tax is imposed. a. Using the midpoint formula, after the tax is...
Suppose that the long-run price elasticity of demand for gasoline is 0.45. Assume that the price of gasoline is currently $4.00 per gallon, the quantity of gasoline is 140 billion gallons per year, and the federal government decides to increase the excise tax on gasoline by $1.00 per gallon. Suppose that in the long run the price of gasoline increases by $0.60 per gallon after the $1.00 excise tax is imposec. a. Using the midpoint formula, after the tax is...
The price elasticity of demand for gasoline is likely to be higher in the long run than in the short run. False True
In the long run, the tax reduces the consumption of gasoline
by _____ billion gallons per year.
(Enter your response rounded to two decimal places.)
b. The amount of tax revenue the federal government recieves
from the tax is $_____ billion.
(Enter your response rounded to two decimal places.)
c. Compared to the short-run effect of an increase in the
excise tax on gasoline, the long-run effect of an increase in the
excise tax has a _____ effect on the...
Most questions answered within 3 hours.
-
Consider the following data for a dependent variable y and two
independent variables, x1 and x2....
asked 2 minutes ago -
13.
Given the following definitions:
U = {1, 2, 3, 4, 5, 6, 7}
A =...
asked 3 minutes ago -
1. Let us again continue with analyses of data from the study of
M Daviglus et...
asked 3 minutes ago -
Research paper on a Sex Crime and Policy Topic
Including all 3 origins “sex crime and...
asked 4 minutes ago -
6. What volume will 40.0mL of nitrogen, measured at 15.0°C and
780.0torr, occupy at STP?
7....
asked 4 minutes ago -
Scientists have meaured that at a distance of 1 AU from star X
energy of radiation...
asked 16 minutes ago -
Q4 #4
How far apart are an object and an image formed by a
89-cm-focal-length converging...
asked 21 minutes ago -
What function do boron esters serve in polymers?
asked 22 minutes ago -
In a survey of 1147 small-business owners, the following
question was posed: Would you recommend working...
asked 48 minutes ago -
The value of the equilibrium constant Kc for the reaction
N2(g)+3H2(g)⇌2NH3(g) changes in the following manner...
asked 55 minutes ago -
There are two flasks on the bench top, one flask contains a 0.50
M NaCl solution...
asked 1 hour ago -
Which of the following aqueous solutions are good buffer
systems?
.
0.10 M hydrofluoric acid +...
asked 1 hour ago