Grade 8 - Review Week 8

What is the (very) main reason for the increase of demand for fossil fuels?

• the existence of biofuels and other renewable resources

• the increase of global population

• the increase of industrial activities

• the price for fossil fuels continues to decrease

Which of the following ARE the reasons why fossil fuel is considered price inelastic?

• it's basic needs

• other substitutes are relatively more expensive

• biofuels exist as its main competitor

• it is considered as luxurious product especially in Europe

Pay attention to the graph above. It is a price inelastic demand curve. Now, which of the followings is correct about price inelasticity of demand? (more than 1 answer)

• the percentage change in Qd is greater than the percentage in price

• the percentage in Qd is smaller than the percentage change in price

• the demand is relatively unresponsive to changes in price

• The demand is relatively responsive to changes in price

Which of the following are the correct reasons why biofuel is considered price elastic?

• relatively new in the market

• It's basic needs so people will buy it despite the high price

• It's relatively cheaper compared to its competitors

• It's relatively more expensive than its main competitor, fossil fuel

How do biofuels contribute to a country's economy?

• It helps to create jobs which enables people to buy products and pay taxes

• the more biofuels used by a country, the less it become reliant on fossil fuels (less expenses spent on fossil fuels)

• it does not create green house effect that is harmful for the environment

• It's cheaper so the people can safe money other things than fuels