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

question 394

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 equilibrium price will

• A) increase in the aged cheddar cheese market and increase in the bread market.
• B) increase in the aged cheddar cheese market and decrease in the bread market.
• C) decrease in the aged cheddar cheese market and increase in the bread market.
• D) decrease in the aged cheddar cheese market and decrease in the bread market.

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Definitions:

Bad Faith Bargaining

Negotiations where one or more parties refuse to engage sincerely or with the intent to reach an agreement, typically violating principles of honesty and fairness.

National Labor Relations Act

A foundational US law enacted in 1935 that protects the rights of employees to organize, bargain collectively, and engage in concerted activities for mutual aid or protection.

Direct Dealing

A labor relations strategy where employers interact directly with employees rather than through union representatives.

Intraorganizational Bargaining

The process of negotiation and compromise within an organization, such as between different departments or levels of management, to align goals or strategies.