The gasoline demand is derived from the demand for transportation services. For this specific example, think of the demand for transportation services as the number of the miles people want to drive each month. You can safely assume that the number of miles demanded each month is directly related to how much it costs to drive an additional mile ( the marginal cost of gasoline per mile).
To figure out how much it costs to drive an extra mile, we need to know the fuel efficiency (miles per gallon, or mpg). of the driver's car, along with the prices of gasoline. Suppose the price of gasoline is $6 per gallon and Carrie drives a truck that gets 10 miles per gallon. For Carrie, the marginal cost of gasoline per mile is $6 per gallon or $0.60 per mile.
Let's explore how changes in fuel efficiency affect the driving habits of two drivers, Rory, and Lucille.
Assume that Rory and Lucille each drive identical cars that get 24 miles per gallon. When gas cost $3.60 per gallon, they each drive 1,560 miles per month. When gasoline is $3.60 per gallon, the extra cost of driving one additional mile ( the marginal cost per mile) is _______? ( which answer fills the blank $0.51, $0.25, $0.15, $0.36). They each buy ______ ( which answer fills the blank 50, 60, 65, 433) gallons of gasoline per month, and at $3.60 per gallon, they each spend _________ ( which answer fills the blank $5616.00, $180.00, $234.00, $175.00). per month on gasoline.
Assume each driver buys the same new, more fuel-efficient car that gets 30 mpg. When gasoline is $3.60 per gallon, the marginal cost per mile for the new car is ______ ( which answer fills in the blank $0.36, $0.12, $0.22, $0.56).
You can use the price elasticity of demand to see how a change in the marginal cost per mile of driving will impact Rory's and Lucille's driving habits. The price elasticity of demand is the absolute value of the percentage change in the quantity divided by the percentage change in price.
In this case, Q1 is the number of miles driven each month before the switch to a more fuel-efficient car and Q2 is the number of miles driven each month after the switch. P1 is the marginal cost per mile of the car that gets 24 miles per gallon and P2 is the marginal cost per mile of the car that gets 30 miles per gallon.
In the old car, Rory drove 1,560 miles per month. In the new car, Rory drives 2,040 miles per month. Rory buys ________ ( which answer fills in the blank 37.3, 375, 57.8, 68) gallons of gasoline per month and spends ________ ( which answer fills in the blank $231.25, $240.00, $244.80, $ 168.00). With the new car, Rory buys _______ ( which answer fills in the blank the same amount of, more, or less) gasoline each month. Rory price elasticity of demand for miles per month is _______ ( which answer fills in the blank 0.85, 1.20, 1.50, 0.62).
In the old car, Lucille drove 1,560 miles per month. In the new car, Lucille drives 1,760 miles per month. Lucille buys __________ ( which answer fills in the blank 45, 286, 58.67, 62.5) gallons of gasoline per month and spends ___________( which answer fills in the blank $250.00, $157.50, $211.20, $375.00). With the new car, Lucille buys ________ ( which answer fills in the blank, the same amount of, more, less) gasoline each month. Lucille's price elasticity of demand for miles per month is _________ ( which answer fills in the blank, 1.16, 0.54, 0.85, 0.42).
The gasoline demand is derived from the demand for transportation services. For this specific example, think of the demand for transportation services as the number of the miles people want to drive each month. You can safely assume that the number of miles demanded each month is directly related to how much it costs to drive an additional mile ( the marginal cost of gasoline per mile).
To figure out how much it costs to drive an extra mile, we need to know the fuel efficiency (miles per gallon, or mpg). of the driver's car, along with the prices of gasoline. Suppose the price of gasoline is $6 per gallon and Carrie drives a truck that gets 10 miles per gallon. For Carrie, the marginal cost of gasoline per mile is $6 per gallon or $0.60 per mile.
Let's explore how changes in fuel efficiency affect the driving habits of two drivers, Rory, and Lucille.
Assume that Rory and Lucille each drive identical cars that get 24 miles per gallon. When gas cost $3.60 per gallon, they each drive 1,560 miles per month. When gasoline is $3.60 per gallon, the extra cost of driving one additional mile ( the marginal cost per mile) is _______? ( which answer fills the blank $0.51, $0.25, $0.15, $0.36). They each buy ______ ( which answer fills the blank 50, 60, 65, 433) gallons of gasoline per month, and at $3.60 per gallon, they each spend _________ ( which answer fills the blank $5616.00, $180.00, $234.00, $175.00). per month on gasoline.
Assume each driver buys the same new, more fuel-efficient car that gets 30 mpg. When gasoline is $3.60 per gallon, the marginal cost per mile for the new car is ______ ( which answer fills in the blank $0.36, $0.12, $0.22, $0.56).
You can use the price elasticity of demand to see how a change in the marginal cost per mile of driving will impact Rory's and Lucille's driving habits. The price elasticity of demand is the absolute value of the percentage change in the quantity divided by the percentage change in price.
In this case, Q1 is the number of miles driven each month before the switch to a more fuel-efficient car and Q2 is the number of miles driven each month after the switch. P1 is the marginal cost per mile of the car that gets 24 miles per gallon and P2 is the marginal cost per mile of the car that gets 30 miles per gallon.
In the old car, Rory drove 1,560 miles per month. In the new car, Rory drives 2,040 miles per month. Rory buys ________ ( which answer fills in the blank 37.3, 375, 57.8, 68) gallons of gasoline per month and spends ________ ( which answer fills in the blank $231.25, $240.00, $244.80, $ 168.00). With the new car, Rory buys _______ ( which answer fills in the blank the same amount of, more, or less) gasoline each month. Rory price elasticity of demand for miles per month is _______ ( which answer fills in the blank 0.85, 1.20, 1.50, 0.62).
In the old car, Lucille drove 1,560 miles per month. In the new car, Lucille drives 1,760 miles per month. Lucille buys __________ ( which answer fills in the blank 45, 286, 58.67, 62.5) gallons of gasoline per month and spends ___________( which answer fills in the blank $250.00, $157.50, $211.20, $375.00). With the new car, Lucille buys ________ ( which answer fills in the blank, the same amount of, more, less) gasoline each month. Lucille's price elasticity of demand for miles per month is _________ ( which answer fills in the blank, 1.16, 0.54, 0.85, 0.42).
