How have you responded to increases in the price of gasoline over the past few y

Question

How have you responded to increases in the price of gasoline over the past few years? How would you respond if the price of gasoline doubled over the next two years? What alternatives do you have for buying gasoline? Could you change to zero consumption of gasoline in the short run? In the long run? In the short run, when the price of gasoline increases, what happens to the income you have to spend on other goods? Try to use concepts seen in this unit such as budget constraint, income and substitution effects, etc. in your answer.

Explanation / Answer

A)I must respond normally as everyone is suffering from this and just increase my saving so as to cope with this..!!! B)In that case we must plan a campiagn to stop the wastage of fossil fuel and will rather prefer CNG vehicles..!!' C)Alternatives are CNG,Solar vehicles..!! D)Quantity will decrease as income will decrease..!!

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