If the Price of Milk Increased by 5 Percent Because

question 3

Multiple Choice

If the price of milk increased by 5 percent because of an increase in the demand for milk, and the quantity of milk supplied increased by 7 percent

• A) the supply curve of milk has shifted rightward.
• B) the price elasticity of supply of milk is greater than one.
• C) milk is more of a luxury than a necessity.
• D) milk is more of a necessity than a luxury.

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Definitions:

Progressive

A tax system in which the tax rate increases as the taxable amount increases, often aimed at reducing income inequality.

Payroll Taxes

Contributions required from employers and their workers, determined as a portion of the payroll expenses incurred by the employer.

Workers

Individuals engaged in any form of productive activity, typically in exchange for wages or salaries.

Corporate Profits Tax

A levy placed on the profit of corporations, calculated as the net income of the firm after deducting costs and expenses.