Why the law of demand applies to gasoline

Assignment Help Microeconomics
Reference no: EM132113388

Question: The price of gasoline has increased during the past year.

a. Explain why the law of demand applies to gasoline just as it does to all other goods and services.

b. Explain how the substitution effect influences gasoline purchases and provide some examples of substitutions that people might make when the price of gasoline rises and other things remain the same. c. Explain how the income effect influences gasoline purchases and provide some examples of the income effects that might occur when the price of gasoline rises and other things remain the same.

Reference no: EM132113388

Questions Cloud

Let x denote the attendance : 1. Let X denote the attendance. Why is X a random variable? 2. What is the expected attendance?
What is the relative price of the wii game : The money price of a textbook is $90 and the money price of the Wii game Super Mario Galaxy is $45. What is the relative price of the Wii game in terms.
Should you have access to those emails and files : Should you have access to those emails and files on a personal device that is accessing the company data via a 3rd party app.
Computing and storage infrastructure design : Computing and storage infrastructure design, and Information integration - A Python scrip file with the name ‘practice_locator.py' will contain this RESTful
Why the law of demand applies to gasoline : Explain why the law of demand applies to gasoline just as it does to all other goods and services. Explain how the substitution effect influences gasoline.
Importance of consumers and the community in health services : Discuss the importance of consumers and the community in health services.
Describe the project scope and provide a brief cost : ISY2001 – Provide a description of the business case and justification about the business benefits from implementing this system.
Explain the effect of each of the given events : Think about the demand for the three game consoles: Xbox One, PlayStation 4, and Wii U. Explain the effect of each of the following events on the demand.
How a rise in the price of sawdust influences supply of logs : When a timber mill makes logs from trees it also produces sawdust, which is used to make plywood. Explain how a rise in the price of sawdust influences.

Reviews

Write a Review

Microeconomics Questions & Answers

  Respond if the inflation rate would rise naturally

The inflation rate would rise naturally as it always has the trick is to keep the supply of product as closely inline with consume needs. This can be done in many ways. If you see prices of a certain product climb you should look at ways to slow t..

  Compute real gdp for each case

Using the production function shown above, compute real GDP for each case and capital is constant but labour is increasing. What property of the production function is displayed? Explain.

  What would factor price equalization imply happens to wages

A small industrialized country initially has no trading links with a large, but closed, cen- trally-planned economy that shares a border. Wages per hour for skilled and unskilled work- ers are $25 and $12, respectively, in the industrialized econo..

  What is the marginal rate of substitution

What is the marginal rate of substitution (MRS) and why does it diminish as the consumer substitutes one product for another? Use examples to illustrate.

  Compute the value of the correlation coef?cient

The paper "A Cross-National Relationship Between Sugar Consumption and Major Depression?" concluded that there was a correlation between re?ned sugar consumption and annual rate of major depression (cases per 100 people) based on data, Constru..

  Analyze short-run and long-run production and cost functions

Analyze short-run and long-run production and cost functions. Apply macroeconomic concepts to changes in global and national economies and how they affect economic growth, inflation, interest rates, and wage rates.

  Effect upon equilibrium price and quantity sold

Normal 0 false false false EN-US X-NONE X-NONE Determine the effect upon e..

  How easy would it be for new competitors

Describe the business and its likely main competitors - How would you structure your advertising and customer service to differentiate your product/service and How easy would it be for new competitors to enter your market and erode your customer base..

  Contrast some of the most popular online auction sites

Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 ..

  Discuss the factors that lead to financial crises

How do increases in interest rates play a role in promoting financial crises - Discuss the factors that lead to financial crises

  Changes in price of a key commodity

How would government react to sudden, large changes in the price of a key commodity, such as gasoline, electricity, or prices on stocks on the New York Stock Exchange?

  Implement the sustainability in an organization

Implementation of Sustainability in an Organization. Evaluates and anticipates risks associated with the investment.

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!

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