Intermediate Microeconomics

Individual Assignment

Name:

ID:

Section:
Contents
1 Introduction:............................................................................................................................4

1.1 Background.......................................................................................................................4

1.2 Importance of the product.................................................................................................4

1.3 Objective of Report...........................................................................................................4

2 Analysis:..................................................................................................................................4

2.1 Demographics:..................................................................................................................4

2.1.1 Gender........................................................................................................................4

2.1.2 Age.............................................................................................................................5

2.1.3 Education...................................................................................................................5

2.1.4 Industry......................................................................................................................6

2.1.5 Experience.................................................................................................................6

2.2 2. How much is the current consumption of the product or service at the current prices?
(In litters).....................................................................................................................................7

2.3 3. What is the percentage you allocate from income for the consumption of the
Gasoline?.....................................................................................................................................7

4. At what price would you change your consumption behavior? (E.g. if price increase by......9

5. If the prices reached that level where you will change your consumption behavior, how
would you do it..........................................................................................................................10

2.4 6. How does the behavior change in the short-run (6 months to 1 year)?......................10

2.5 7. How does the behavior change in the long-run (more than 1 year)?.........................11

2.6 8. If the Value Added Tax proposed were increased to 10%, 15%, and 20%, how would
you change your consumption given the current prices?...........................................................11

2.7 9. If the government decided to go back to the old “no VAT” will you change your
consumption, how?....................................................................................................................12

2.8 10. How the recent COVID-19 pandemic did change your consumption behavior of the
Gasoline?...................................................................................................................................13
 2.9 11. How much does your concern about the environment affect your purchases?.........13

3 Conclusion.............................................................................................................................15

4 Appendix................................................................................................................................16

Table of Figures
Figure 1............................................................................................................................................7
Figure 2............................................................................................................................................7
Figure 3............................................................................................................................................8
Figure 4............................................................................................................................................9
Figure 5..........................................................................................................................................10
Figure 6..........................................................................................................................................10
Figure 7..........................................................................................................................................11
Figure 8..........................................................................................................................................11
Figure 9..........................................................................................................................................12
Figure 10........................................................................................................................................13
Figure 11........................................................................................................................................13

List of Tables

Table 1.............................................................................................................................................4
Table 2.............................................................................................................................................5
Table 3.............................................................................................................................................5
Table 4.............................................................................................................................................6
Table 5.............................................................................................................................................6
1 Introduction:

1.1 Background
For the current assignment the “Gasoline for Cars” has been selected. Gasoline is an inelastic
product and highly demanded as it is needed by almost every industry in the world.

1.2 Importance of the product

From the previous various researches it is resulted that the change in price of gasoline does not
affect the purchasing behavior of this product. Even considerable increase in the price leads to a
minor change in purchasing behavior.

1.3 Objective of Report

A survey questionnaire was developed using Google forms and distributed among users of
Gasoline working in different industries of Lahore Pakistan. The responses received through
Google forms and analyzed for a proper result. The detail of the analysis and questionnaire is
discussed below.

2 Analysis:

2.1 Demographics:

2.1.1 Gender
Table 1

Frequency Percent Cumulative Percent

Valid Female 3 20% 20%
Male 12 80% 100%
Total 15 100%
The above table indicates the values of descriptive test for Gender of respondents. Out of total 15
respondents 3 were female representing the 20% while 12 Males represent 80% of total
respondents.

2.1.2 Age
Table 2

Frequency Percent Cumulative Percent

Valid 18 to 20 0 00.0% 0
21 to 30 6 40.0% 40%
31 to 40 7 46.7% 86.7
41 to 50 2 13.3% 100%
Total 15 100%
The above table indicates the values of descriptive test for Age of respondents. Out of total 15
respondents 6 having ages 21 to 30 years represents 40%, 7 having ages from 31 to 40 years
represents 46.7%, and 2 having ages between 41 to 50 years represents 13.3%.

2.1.3 Education
Table 3

Frequency Percent Cumulative Percent

Valid Graduate 5 33.3% 33.3%
Masters 6 40.0% 73.3%
M.Phil. 4 26.3% 100%
Total 15 100.%
The above table indicates the values of descriptive test for Education of respondents. 5 Graduates
represents 33.3%, 6 Masters represents 40%, and 4 M.Phils. Represents 26.3% of the data of 15
respondents.
2.1.4 Industry
Table 4

Frequency Percent Cumulative Percent

Valid Banking 3 20% 20%
Construction 1 6.7% 26.7%
Manufacturing 5 33.3% 60%
Medical 2 13.3% 73.3%
Service 4 26.7% 100.0%
Total 15 100.0
The above table indicates the values of descriptive test for industry. 3 respondents from Banking
industry represents 20% of data, 1 respondent from Construction industry represents 6.7%, 5
respondents from manufacturing industry represents 33.3%, 2 respondents from medical industry
represents 13.3% , and 4 respondents from Service industry represents 26.7% of total.

2.1.5 Experience
Table 5

Frequency Percent Cumulative Percent

Valid 1 to 5 6 40% 40.0%
6 to 10 6 40% 80.0%
11 to 15 2 13.4% 93.4%
16 to 20 1 6.6% 100.0%
Total 15 100.0%
The above table shows the result values of Descriptive analysis for Experience of respondents.
The data is tabulated into four different ranges, range group one shows the data of respondents
with one year to five years’ experience 6 representing 40% of data, group two shows values of 6
years to 10 years’ experience 6 represents 40% of data, group three shows values of 11 to 15
years of experience 2 respondents represents 13.4% of data, and group four shows the values of
16 years to 20 years of experience 1 respondent represents 6.6% of data.
2.2 2. How much is the current consumption of the product or service at the
current prices? (In litters)

Figure 1

The above figure indicates the consumption of Gasoline by all fifteen respondents of this survey.
And following chart indicates the response each respondent separately. Most of people uses
below hundred litters of Gasoline in a month while a few uses more than one hundred litter of
Gasoline on monthly basis.

Figure 2

2.3 3. What is the percentage you allocate from income for the consumption
of the Gasoline?
 Figure 3

The above pie-chart indicates the responses of question number three regarding spending on the
Gasoline for the Car. 13.3% of the allocates up to 10% of their income for gasoline, 26.7%
respondents allocate 16% to 20% of their income for consumption of gasoline, while 60% of the
respondents allocate 11% to 15% of their income for consumption of gasoline for their cars.

4. At what price would you change your consumption behavior? (E.g. if price
increase by:

Figure 4
When people asked for at what level of increase in price will change your behavior of
consumption they responded as above. 6.7% of respondents stated that they will change their
consumption behavior if prices change from 31% to 50%, 13.3% of respondents said that they
will change their consumption behavior if price increases up to 10%, while 46.7% of respondents
said they will change consumption behavior if prince increases from 21 to 30 percent of the
normal price.

5. If the prices reached that level where you will change your consumption
behavior, how would you do it?

Figure 5

In the response of question regarding their change in behavior when the price reached to their
level where they will change consumption behavior. 86.7% respondents responded that they will
Move to cheaper subordinate of the gasoline while 13.3% of the respondents said that they will
remain consuming the gasoline for their cars.
2.4 6. How does the behavior change in the short-run (6 months to 1 year)?

Figure 6

In the above figure responses of the question number six has been indicated. In the answer of
question number six 53.3% of respondents said they will move to cheaper subordinate of the
gasoline while 46.7 of respondents said that they will remain consuming.

2.5 7. How does the behavior change in the long-run (more than 1 year)?

Figure 7

In response to question number seven 6.7% of respondents said they will Quit buying the
gasoline, 13.3% of them said they will remain consuming while 80% of respondents said that
they will move to cheaper subordinate.
2.6 8. If the Value Added Tax proposed were increased to 10%, 15%, and
20%, how would you change your consumption given the current prices?

Figure 8

6.7% of the respondents said their consumption will be increase if Value Added Tax proposed
increased. 26.7% of respondents said their consumption will remain same. While 40% said that
their consumption will be reduced with the increase in Value Added Tax.

2.7 9. If the government decided to go back to the old “no VAT” will you
change your consumption, how?

Figure 9
The above Pie-Chart indicates the responses of Question that in case of revert of VAT how will
they change your consumption. 20% said that they will move to a new level, 33.3% said they
will go back to previous level, and 46.7% said that they will maintain current position.

2.8 10. How the recent COVID-19 pandemic did change your consumption
behavior of the Gasoline?

Figure 10

In the current COVID-19 pandemic 6.7% of respondents said their consumption remain same
while 93.3% said that their consumption of gasoline has be reduced.

2.9 11. How much does your concern about the environment affect your
purchases?

Figure 11
20% of the respondents said that they have no concern about the environment while purchasing
the gasoline, 40% said they have little effect on purchases by their concern regarding
environment, while 40% said the concert about the environment affects their purchases highly.
3 Conclusion

Gasoline for the cars are the basic need of every person now a days because traveling is the most
important in daily life. From the above survey responses it is clear that minor increase in the
price of Gasoline does not affect the purchasing behavior of the user. For the question regarding
amount of allocation for gasoline consumption people clearly answered they allocate healthy
amount from their income just for gasoline which is almost twenty percent of monthly income.
As the gasoline is an inelastic product people ready to bear twenty to fifty percent of increase in
price of gasoline after that would move to the cheap substitute. From the data is shown that
responded indicated the short term increase in prices of gasoline for up to six months will not
change the purchasing behavior. Even in long-term increase in price thirteen percent people said
they will still consume the same product while majority said in case of increase in price will led
their move towards cheap substitute. If government imposes Value Added Tax on gasoline, in
that case online twenty six percent said that will move to some cheap substitute and forty percent
said their consumption will decrease. One the question if government removes VAT will they
comeback to previous level of consumption majority of respondent said they will maintain
current level while thirty-three percent decided to go back with previous level. In the condition
of COVID-19 pandemic ninety-three percent respondent said their consumption has been
decreased. From the above analysis it is indicated that people show their concern about
environment and this concern effects their purchasing behavior. As in the answer of the question
regarding environmental concern forty percent of respondents showed highly concerned while
forty percent showed the little concern.
4 Appendix