Three Multiple Choise Questoins :) The price of gasoline has increased during th

Question

Three Multiple Choise Questoins :)

The price of gasoline has increased during the past year. The law of demand applies to gasoline because when the price of gasoline rises,_____. the demand for gasoline increases . the quantity demanded decreases . the demand for gasoline decreases . the quantity demanded increases The income effect influences gasoline purchases because when the price of gasoline rises, other things remaining the same,_____. Consumers_____. . demand for gasoline increases; buy more gasoline because it is a normal good . demand for gasoline increases; believe that the price may rise even further so they buy more gasoline now . demand for gasoline decreases; buy less gasoline and more tickets for public transit . the price of gasoline rises relative to income; cannot afford to buy all the things they previously bought, so they buy less gasoline The substitution effect influences gasoline purchases because when the price of a litre of gasoline rises, other things remaining the same,_____. Consumers_____. . its relative price rises; look for alternate means of transportation . the relative prices of all car accessories rises; continue to purchase gasoline, but in smaller quantities. . its relative price does not change because most likely the prices of all other goods will also rise because fuel is a productive resource in the production of all goods; continue to purchase gasoline, but in smaller quantities. the relative price of all vehicles rises; purchase fewer gas guzzlers and more fuel-efficient cars

Explanation / Answer

1-c

2-d

3-a

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