If U.S.consumers bought more gasoline in 2008 (when prices averaged $3.22 per gallon) than they did in 1970 (when prices averaged $0.30 per gallon), does that mean that people buy more gasoline at higher prices?
A)No, because 1970 prices are ancient history compared to 2001 prices.
B)No, because there is too little information provided about inflation, consumer income and other variables to make an appropriate comparison.
C)Yes, because gas is a necessity that is in short supply. Consumers are always willing to buy more gasoline-even at higher prices.
D)Yes, because gasoline is a luxury good that consumers willingly purchase - even at higher prices.

Question

Quizplus · Accepted Answer

The comparison between gas purchases in 1970 and 2008 is not a reliable indicator of whether people buy more gasoline at higher prices. There are too many other factors that could influence the amount of gasoline people buy, such as inflation and changes in consumer income.

If USConsumers Bought More Gasoline in 2008 (When Prices Averaged $3