QUESTION 1 Suppose government passes new rules that require automobile manufactu

Question

QUESTION 1 Suppose government passes new rules that require automobile manufacturers to improve the fuel efficiency of their vehicles to a minimum of 25 mpg. With gas prices rising, the government is banking that consumers will buy the newer, more fuel efficient vehicles, and reduce the amount gas consumed in total. Select the most likely consequence of the government's new rule to improve the fuel efficiency Consumers will spend less on gas and drive fewer miles because they can drive more miles per gallon. Consumers will spend less on gas and drive the same number of miles because they can drive more miles per gallon. Consumers will spend the same or more on gas and drive more miles because gas is cheaper per mile All of the above will happen

Explanation / Answer

The correct choice is :- Consumers will spend the same or more on gas and drive more miles because is cheaper per mile

Explanation : - When government makes rules to improve fuel efficiency the number of miles driven by consumers will increases due to higher fuel efficiency. With fuel prices unchanged, the spending on gas remains the same but more miles will be driven. On the other hand consumers may fill more gas to drive more miles than before when the vehicle was less fuel efficient.

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.