Scenario 5-4 the Supply of Aged Cheddar Cheese Is Inelastic, and the and the Supply

question 447

Multiple Choice

Scenario 5-4
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 5-4. The equilibrium quantity will

• A) increase in both the aged cheddar cheese and bread markets.
• 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 both the aged cheddar cheese and bread markets.

---

Definitions:

Assessed

Evaluated or estimated the value, quality, or extent of something.

Groupthink

A psychological phenomenon that occurs within a group of people when the desire for harmony or conformity results in an irrational or dysfunctional decision-making outcome.

Assumptions

A considered belief or supposition made before having full knowledge, used as a basis for decision-making in various contexts.

Inhibits

Describes the action of hindering, limiting, or preventing something from progressing or occurring.