The Market for Macaroni and Cheese Has Only Two Consumers

question 28

Multiple Choice

The market for macaroni and cheese has only two consumers, Darshak and Winta. Market demand for macaroni and cheese will tend to be more elastic if:

• A) Darshak and Winta consider macaroni and cheese to be a necessity good rather than a luxury good.
• B) Darshak and Winta consider macaroni and cheese to be an inferior good rather than a normal good.
• C) Darshak and Winta consider macaroni and cheese to be a normal good rather than an inferior good.
• D) Darshak and Winta consider macaroni and cheese to be an economic "bad."

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Definitions:

Mid-2010

A reference to the middle part of the year 2010, often used in economic and demographic analyses.

Deposit Expansion Multiplier

A ratio that indicates the potential increase in money supply through the banking system's ability to lend more based on reserves.

Vault Cash

The physical money that banks keep in their vaults as part of their reserves.

Reserve Requirement

The minimum amount of reserves that banks must hold, either in their vaults or on deposit with a central bank, as a regulatory measure intended to ensure bank liquidity.