If Canadian consumers bought more gasoline in 2007 (when prices averaged $1.30 per litre) than they did in 1980 (when prices averaged $0.40 per litre), does that mean that people buy more gasoline at higher prices?
A) Yes, because gasoline is a luxury good that consumers willingly purchase-even at higher prices.
B) Yes, because gas is a necessity that is in short supply. Consumers are always willing to buy more gasoline-even at higher prices.
C) No, because there is too little information provided about inflation, consumer income and other variables to make an appropriate comparison.
D) No, because prices cannot be compared over time.

Question

Quizplus · Accepted Answer

The question does not provide enough information to make an appropriate comparison. Inflation and other variables could have affected the purchasing power of consumers, making it difficult to conclude that people buy more gasoline at higher prices. Therefore, we cannot simply compare the raw price of gasoline in 2007 and 1980 to make this judgment.

If Canadian Consumers Bought More Gasoline in 2007 (When Prices