Gasoline Consumption - Assignment Example

1. Average gasoline consumption for 1992 is 7274.3846

    Average gasoline consumption for 2007 is 9357.0196

9357.0196 - 7274.3846 = 2082.635

2082.635/ 7274.3846 *100 = 28.63% increase in fuel consumption

The fuel consumption increased by 28.63% in 15 years. This was because the population in 15 years increased. In addition, the number of people owning vehicles increased thus increasing the amount of fuel consumed. Even though the prices of fuel increased, people cannot stop fueling their cars. The increased percentage is insignificant.

1. b)

Summer 2005 average price = $5.85

     Summer 2006 average price = $5.85

     Summer 2007 average price = $5.85

    Weekly consumption of summer 2005 = 9460.6923

    Weekly consumption of summer 2006 = 9513.4

     Weekly consumption of summer 2007 = 9618.8461​

     Summer 2008 average price = $5.85

    Weekly consumption of summer 2008 = 9369.25​

The consumption of gasoline does not decrease with a price increase. Other factors affect the reduction in consumption. This is because from 2005-2007, the consumption increased with a higher price but in 2008, the consumption decreased while the price was the same as the one in 2005-2007. Thus, other factors must have affected the decrease in consumption. 

The American consumer is not paying too much over time since the price of gas is increasing at the same time the median income is also increasing.