I was taking a taxi from rural Bavaria, Germany to the airport in Munich. Another driver did something stupid and I told the driver that in the U.S. we might have given the driver an obscene gesture. He said he would have, but there is a fine of about $240 in Bavaria for doing that.

Do these fines reduce the number of gestures given (do people move up the demand curve as prices rise)? To what extent are different gestures substitutes whose consumption depends on the relative prices (i.e., fines). More generally, what is the price elasticity of demand for giving obscene gestures.

How elastic do you think your own behavior would be in response to a difference in fines for different gestures? If the chance that you might be caught increases, what happens to your price elasticity of demand for giving obscene gestures? Answer in paragraph