Q1Consider the information in the attached file Currently wi

Q1?Consider the information in the attached file. Currently (with the old car) Lars is buying ? gallons of gasoline and traveling ? miles per week.

Q2: Consider the information in the attached file. Lars\'s father hopes/expects that with the new car his son\'s weekly gasoline cost will drop to ? dollars, but it actually decreases to only ? dollars.

Q3: Consider the information in the attached file. In this story the rebound equals ? percent.

Lars has a gas guzzler that runs 20 miles per gallon (mpg 20). The price of gasoline is $6 per gallon. Lars\'s father buys him a brand new hybrid car that runs 40 miles per gallon (mpg = 40). The following graph shows Lars\'s weekly demand function for miles travelled. 0.55 0.50 0.45 0.40 0.35 0.30 0.25 0.20 0.15 0.10 0.05 0.00 0 20 40 6080 100 120 140 160 180 200 220 Miles Travelled (M)

Solution

1.

Price per mile (Pm) = (Per gallon price) / (Total miles per gallon)

                                = $6 / 20

                                = $0.30

The corresponding figure of Pm = $0.30 is 80.

Therefore, the total miles travelled = 80.

Total cost = 80 × $0.30 = $24

Gasoline purchased for ($24 / $6 =) 4 gallon.

Answer: Currently L is buying 4 gallon of gasoline and travelling 80 miles per week.

2.

Price per mile (Pm) = (Per gallon price) / (Total miles per gallon)

                                = $6 / 40

                                = $0.15

Father hopes of dropping cost to ($0.15 × 80 =) $12.

But corresponding figure of $0.15 is 140 miles.

Actual decrease to ($0.15 × 140 =) $21.

Answer: Father hopes that the gasoline cost will drop to $12, but it actually decreases to only $21.

3.

Actual decrease = $24 - $21 = $3

Percentage decrease = ($3 / $24) × 100 = 12.5%

The rebound equals 12.5%.