1. If the price of gasoline doubled, how would consumption of (a) cars, (b) public transportation, and (c) in-theatre movies be affected? How quickly would these adjustments be made?

2. If you owned a movie theatre would you want the demand for movies to be elastic or inelastic?

3. Owner/operators of small gas stations rarely pay themselves an hourly wage. How does this practice affect the economic cost of dispensing gasoline?

4. Why don’t more U.S. firms move to Mexico to take advantage of low wages there? Would an identical plant in Mexico be as productive as its U.S. counterpart?