Each state imposes its own excise tax on gasoline. Suppose, for example, that the state of Massachusetts imposes a state gasoline tax of $0.26 per gallon. Suppose further that an average of 1,022,000 gallons of gasoline per day were sold in Massachusetts in 2010.

a.Massachusetts' total revenue from the gasoline tax in 2010 was approximately

• $86 million
• $232 million
• $97 million
• $111 million

b.A recent study found that in the long run (defined as more than one year), the price elasticity of demand for gasoline is -0.58.

If Massachusetts were to double its gasoline tax, its revenue from the tax would

• fall by 58 percent.
• fall by 100 percent.
• more than double.
• rise but not double.