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due Thursday June 30, 2016
8:30pm
One (1) page extension

MicroEconomics

Discussion.

3-1 Discussion: Examining Elasticity

After watching the Section 5.3 Review and Section 6.2 Review videos, respond to the questions below.

Gas prices fluctuate often and in both directions. In your initial post, respond to the following:

How responsive do you think consumers will be to the price change when these fluctuations occur due to changes in supply? Why? Use the various determinants of elasticity to explain your answer.
How does the price elasticity of demand for gasoline impact the effectiveness of taxes on gasoline aimed at correcting a negative externality?
Consider incorporating the supply-and-demand model to demonstrate the elasticity of demand for gas and to show the effects of tax on the market for gas.

Section 5.3 Reviews Video

http://media.pearsoncmg.com/ph/bp/bp_hubbard_econ_5/sectionvid/section0503.html

Section 6.2 Review Video

http://media.pearsoncmg.com/ph/bp/bp_hubbard_econ_5/sectionvid/section0602.html

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