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

question 193

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) may be greater in either the aged cheddar cheese market or the bread market.

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