1. The war in Iraq comes to an end. Iran and Afghanistan lay pipes to generate more oil. The United States and Venezuela enter into an era of friendship. Which of the following correctly captures the effect of this change on the market for gasoline?
A. Both equilibrium quantity and price will increase.
B. Both equilibrium quantity and price will decrease.
C. Equilibrium quantity will increase, but equilibrium price will decrease.
D. Equilibrium quantity will decrease, but equilibrium price will increase

2. Ed_t = 5. This means that if
A. P_t increases by 5 percent, then Qd_t will decrease by 1 percent.
B. Qd_t increases by 5 percent, P_t will decrease by 1 percent.
C. P_t increases by 1 percent, Qd_t will decrease by 5 percent.
D. P_t decreases by $1, Qd_t will decrease by 5 units.

3. Let Ed_t = 2. This implies that the demand for movie tickets is
A. inelastic, because a 1 percent change in P_t changes Qd_t by 2 units.
B. inelastic, because a 1 percent change in P_t changes Qd_t by 1 percent.
C. elastic, because a 1 percent change in P_t changes Qd_t by 1 percent.
D. elastic, because a 1 percent change in P_t changes Qd_t by 2 percent.