Scenario 5-1 Suppose That the Supply of Aged Cheddar Cheese Is Inelastic,and

question 500

Multiple Choice

Scenario 5-1
Suppose that 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 5-1.The price elasticity of supply for aged cheddar cheese could be

• A) -1.
• B)0.5.
• C)0.
• D)1.5.

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Definitions:

High Heat Capacity

The property of a substance that allows it to absorb a considerable amount of heat without undergoing a significant change in temperature.

Carbonic Acid

A weak acid formed in solution when carbon dioxide dissolves in water.

Carbon Dioxide

A colorless, odorless gas produced by burning carbon and organic compounds and by respiration. It is naturally present in the air and is absorbed by plants in photosynthesis.

Baking Soda

A chemical compound also known as sodium bicarbonate, used in baking as a leavening agent and for cleaning.