The price elasticity of demand for gasoline

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Reference no: EM131101522

1) The price elasticity of demand for gasoline is 0.5 and the price elasticity of supply for gasoline is 1.1. If demand rises by 25%, the price of gasoline will: Select one:

a. rise by 15.6%. b. fall by 15.6%. c. rise by 6.4%. d. fall by 6.4%.

2) The price elasticity of demand for wheat bread is 2.1 and the price elasticity of supply for wheat bread is 1.6. If demand falls by 20%, the price of wheat bread will: Select one:

a. rise by 5.41%. b. fall by 5.41%. c. rise by 18.5%. d. fall by 18.5%.

3) Good X and good Y are substitutes if the: Select one:

a. income elasticity of each is negative. b. income elasticity of each is positive. c. cross-price elasticity is negative. d. cross-price elasticity is positive

Reference no: EM131101522

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