8. A 10 percent increase in gasoline prices reduces gasoline consumption by about (A) 6 percent after one year and 2.5 percent after five years. (B) 2.5 percent after one year and 6 percent after five years. (C) 10 percent after one year and 20 percent after five years. (D) 0 percent after one year and 1 percent after five years.

18. A study sponsored by the Food Consumer Safety Board found that consumption of irradiated tomatoes increased the health of laboratory rats. As a result of national press coverage of the report, the demand for irradiated tomatoes increased dramatically. Organic farmers were able to switch from organic production of tomatoes to irradiated production with no additional cost. Assume that the tomato market satisfies all of the assumptions of perfect competition. As a result of the increase in the demand for tomatoes, we would predict that in the short run that the (A) production of tomatoes would be at efficient scale. (B) price of tomatoes would rise. (C) total cost for existing irradiated tomato producers must rise. (D) number of firms in the market would fall as prices fall and firms exit the market.

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