Scenario 5-2 the Supply of Aged Cheddar Cheese Is Inelastic, and the and the Supply

question 486

Multiple Choice

Scenario 5-2
The supply of aged cheddar cheese is inelastic, and the supply of bread is elastic. Both goods are considered to be normal goods by a majority of consumers. Suppose that a large income tax increase decreases the demand for both goods by 10%.
-Refer to Scenario 5-2.The change in equilibrium quantity will be

• A) greater in the aged cheddar cheese market than in the bread market.
• B) greater in the bread market than in the aged cheddar cheese market.
• C) the same in the aged cheddar cheese and bread markets.
• D) Any of the above could be correct.

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Definitions:

Morphine

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A group of drugs derived from the opium poppy, used medicinally for pain relief but having a high potential for dependence and abuse.

Endorphins

Natural painkillers produced by the body, often associated with feelings of euphoria.

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Molecules produced by the immune system that promote inflammation and are involved in the body's response to disease and injury.