Final answer:
There is a correlation between the price of gasoline and the amount bought, with price changes affecting purchasing behavior, indicating price elasticity of demand. However, distinguishing whether price changes are a direct cause of changes in purchasing behavior (causation) requires additional study.
Step-by-step explanation:
The student's question deals with the relationship between the price of gasoline and the amount of gasoline purchased by consumers. We can determine that there is a correlation between the amount of gasoline bought and the price. When the price per gallon decreases, people tend to buy more gasoline, suggesting that the demand for gasoline is price elastic; people's purchasing habits change with the price changes. However, ascertaining causation requires more investigation. Causation would mean that the price change is the direct factor causing the change in purchasing behavior.
In economic terms, this behavior relates to the concept of price elasticity of demand. The scenario provided indicates that gasoline has an elastic demand for most consumers, meaning that as prices decrease, the quantity demanded increases, and vice versa. This is a common observation in many markets, where consumers are sensitive to price changes.
It's also worth noting that gasoline is generally considered a necessity with a price inelastic demand over the long term, meaning that consumers will purchase it even when prices rise, up to a certain point. This is because many consumers rely on gasoline for their daily commutes and other transportation needs. The immediate response to a price change may be elastic, but over time and without viable alternatives, the demand tends to be inelastic.