Suppose that a 20% increase in the price of gasoline causes a 5% decrease in the consumption of gasoline and a 30% drop in the sales of SUVs. What can you say about elasticities?

In your response:

a) Be sure to discuss both goods - gasoline and SUVs

b) identify the "type" of elasticity

c) calculate the elasticity of both goods

d) whether the good is elastic, or inelastic

e) For SUVs, discuss what kind of good this is in terms of elasticity