Recent research estimates that the short-run price elasticity of demand for gasoline in the U.S.is -0.3, and the long-run price elasticity of demand is -1.4. What happens if the government increases the federal gasoline tax? Consumer expenditures on gasoline decrease over the short run and long run. Consumer expenditures on gasoline increase over the short run and decline over the long run. Consumer expenditures on gasoline decline over the short run and increase over the long run. Consumer expenditures on gasoline increase over the short run and long run.

Recent research estimates that the short-run price elasticity of demand for gasoline in the U.S.is -0.3, and the long-run price elasticity of demand is -1.4. What happens if the government increases the federal gasoline tax? Consumer expenditures on gasoline decrease over the short run and long run. Consumer expenditures on gasoline increase over the short run and decline over the long run. Consumer expenditures on gasoline decline over the short run and increase over the long run. Consumer expenditures on gasoline increase over the short run and long run.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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