Question

1. Which of the following group of consumers would respond more to a price ncrease Adult smokers Teen smokers Business travellers 2. At lower prices, is demand relatively elastic or inelastic Relatively inelastic Relatively elastic Uni elastic 3. Accordingto a recent report from the Federal Trade Commission (FTC), in the first 3 weeks of August 2003, gas prices in phoenix, Arizona, jumpedom $1.52 to $2.11 a gallon, roughly a 40% increase, due to a ruptured pipeline between Tucson and Phoenix. The pipeline normally brought 30% of Phoenix's fuel from a Texas refinery. During this period, Phoenix gas stations were able to buy gas from West Coast refineries at higher prices. By the end of the month, the rupture was repaired and prices returned to normal. During this 3 week period of supply disruption gasoline sales fell by 8%. What was the approximate price elasticity of demand for gasoline during this period? 0.2 0.75 C3.75