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The Demand for Bread Is Less Elastic Than the Demand

question 193

True/False

The demand for bread is less elastic than the demand for donuts; hence, a tax on bread will create a larger deadweight loss than will the same tax on donuts, other things equal.


Definitions:

Self-Enhancement Motive

The desire to learn favorable or flattering things about the self.

Appraisal Motive

The simple desire to learn the truth about oneself, whatever it is

Automatic Egotism

Response by the automatic system that “everything good is me, and everything bad is not me”

Duplex Mind

The concept that the human mind operates on two levels: a conscious, rational level and an unconscious, automatic level, affecting human behavior and cognition.

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