The price elasticity of demand for gasoline in the short run has been estimated to be 0.1. if a war in the middle east causes the price of oil (from which gasoline is made) to increase, how will that affect total expenditures on gasoline in the short run, all other things equal?

Gasoline expenses will increase in the short term

Explanation:

Price elasticity of demand is a measure of demand sensitivity in the face of price changes. When elasticity is less than 1, we say that demand is inelastic (little sensitive to price changes). In contrast, when elasticity is greater than 1, we say that demand is elastic (price sensitive).

In this case, gasoline has an inelastic demand in the short term. Thus, price increases can occur without decreasing the quantity demanded. As oil has risen, international costs will be passed on to gasoline. Thus, gasoline expenses will be higher, as the price will be higher and the quantity demanded will be maintained.