Q1?Consider the information in the attached file. Currently (with the old car) L
ID: 1256938 • Letter: Q
Question
Q1?Consider the information in the attached file. Currently (with the old car) Lars is buying ? gallons of gasoline and traveling ? miles per week.
Q2: Consider the information in the attached file. Lars's father hopes/expects that with the new car his son's weekly gasoline cost will drop to ? dollars, but it actually decreases to only ? dollars.
Q3: Consider the information in the attached file. In this story the rebound equals ? percent.
Lars has a gas guzzler that runs 20 miles per gallon (mpg 20). The price of gasoline is $6 per gallon. Lars's father buys him a brand new hybrid car that runs 40 miles per gallon (mpg = 40). The following graph shows Lars's weekly demand function for miles travelled. 0.55 0.50 0.45 0.40 0.35 0.30 0.25 0.20 0.15 0.10 0.05 0.00 0 20 40 6080 100 120 140 160 180 200 220 Miles Travelled (M)Explanation / Answer
1.
Price per mile (Pm) = (Per gallon price) / (Total miles per gallon)
= $6 / 20
= $0.30
The corresponding figure of Pm = $0.30 is 80.
Therefore, the total miles travelled = 80.
Total cost = 80 × $0.30 = $24
Gasoline purchased for ($24 / $6 =) 4 gallon.
Answer: Currently L is buying 4 gallon of gasoline and travelling 80 miles per week.
2.
Price per mile (Pm) = (Per gallon price) / (Total miles per gallon)
= $6 / 40
= $0.15
Father hopes of dropping cost to ($0.15 × 80 =) $12.
But corresponding figure of $0.15 is 140 miles.
Actual decrease to ($0.15 × 140 =) $21.
Answer: Father hopes that the gasoline cost will drop to $12, but it actually decreases to only $21.
3.
Actual decrease = $24 - $21 = $3
Percentage decrease = ($3 / $24) × 100 = 12.5%
The rebound equals 12.5%.
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