User Account

All Pages

What does the imply for the volatility of gasoline prices

Assignment Help Macroeconomics
Reference no: EM132995094

An econometric analysis of gasoline price data provided the following demand estimates, where log represents the natural logarithm:

Short run: log Qgasoline = 5 - 0.08 log Pgasoline

Long run: log Qgasoline = 5 - 0.6 log Pgasoline

Question a. -0.08 is the short-run price elasticity of demand for gasoline. What does this mean in words?

Question b. Does it make sense that the long-run elasticity is different from the short-run elasticity?

Question c. What does this imply for the volatility of gasoline prices in the short-run vs. the long run in response to oil price shocks?

Reference no: EM132995094

Questions Cloud

What happens to the interest rate and rate of inflation : If the Fed wants to increase aggregate demand, it can increase the money supply. If it does this, what happens to the interest rate and rate of inflation?
What are the expansionary and contractionary fiscal policies : What are the expansionary and contractionary fiscal policies? What are their policy instruments? How are they used to deal with the inflationary gap?
What aluminum price would need for the hillside project : Alusaf has an 11% cost of capital, What aluminum price would you need for the Hillside project to have a positive net present value (NPV)?
What will be the new equilibrium price paid by consumers : Suppose that the government subsidizes gasoline by paying retailers $1.00 for each gallon sold. What will be the new equilibrium price paid by consumers
What does the imply for the volatility of gasoline prices : Short run: log Qgasoline = 5 - 0.08 log. What does imply for volatility of gasoline prices in the short-run vs. the long run in response to oil price shocks?
Calculate the arithmetic mean and the standard deviation : Calculate the arithmetic mean and the standard deviation of the dividend-price ratio in your sample and Calculate the simple gross return of the risk-free rate
What a financial analysis might reasonably look like in year : Reflect on what a financial analysis might reasonably look like in a year, considering income growth and inflation of consumer prices.
Is this investment worth purchasing : Is this investment worth purchasing? Are there any other considerations you should be thinking of when entering into a financial arrangement such as this
Cons of working for public relations firm versus corporation : Taking into consideration the pros and cons of working for public relations firms versus corporations, decide which job would best fit your abilities and prefer

Reviews

Write a Review

Macroeconomics Questions & Answers

  Why depreciations may be more inflationary

Identify and explain two plausible reasons why depreciations may be more inflationary in some countries than in others?

  Difference between the government purchases multiplier

Explain the difference between the government purchases multiplier and the net tax multiplier. If the MPC falls, what happens to the tax multiplier?

  Real wage and rental rate in labor abundant

According to the Heckscher-Ohlin theorem, is Russia capital abundant or labor abundant? Briefly explain. What is the impact of opening trade on the real wage in Russia? Briefly explain.

  Describe fiscal policy vs monetary policy

Explain the difference between the two , explain the importance of each. Why each are needed? Who is in charge of the Expansionary and Contractionary Policy of each? What tools do each have to control economic policies?

  Stimulate a higher growth rate of real output

Can expansionary monetary policy reduce interest rates and stimulate a higher growth rate of real output in the long run? Explai

  Characteristics of some renewable resources

However, the reputable presumption for some renewable resources is precisely the opposite. What general characteristics of some renewable resources bring this about?

  Calculate the equilibrium consumption in the economy

Assume government expenditure (G) = $820 million, calculate the equilibrium consumption in the economy.

  Explain how would the number of workers hired

Explain how would the number of workers hired (variable input) change. This is a profit maximizing firm, also explain the profit maximization condition the firm uses.

  Interest for each year has been added

When a man retires, he invests $20,000 in a bank, interest at 8% per annum of the amount to his credit to be added at the end of each year. When the interest for each year has been added,

  Article Reviews For Macroeconomics

Article Reviews For Macroeconomics - Review the article and present your thoughts regarding the impact of this event/situation on the Canadian economy.

  Effectiveness of surveillance of social security

Distinguish between a customs union and a common market - Explain why there has been a growth in the underground economy of the United States.

  Elucidate which project should be accepted

Elucidate which project should be accepted if the required rate of return for the projects

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd