Question

A switch on the part of the public from large cars to smaller cars should cause the demand curve for gasoline to tend _______________.

a) not be affected
b) shift to the right
c) rise
d) both b and c
e) shift to the left

I'm confused by this question because I'm not sure if small cars would need more gas or less gas. People say small cars are gas efficient, but they can only hold so little litres or gallons of gas.

Baaah. . .

Answer 1

Smaller cars use less gas because they get better gas milage. Therefore the demand for gas would decrease.