Let Ed _GI refer to the income elasticity for gasoline. Suppose Ed _GI= 2; then this means that if income

1)

increases by 2 percent, Qd _G will increase by 1 percent.

2)

decreases by 1 percent, Qd _G will decrease by 2 percent.

3)

increases by $1, Qd _G will decrease by 2 percent.

4)

decreases by 2 percent, Qd _G will decrease by 1 percent.

Question 10 options: