The Demand for Chicken Wings Is More Elastic Than the Demand

question 60

Multiple Choice

The demand for chicken wings is more elastic than the demand for razor blades.Suppose the government levies an equivalent tax on chicken wings and razor blades.The deadweight loss would be larger in the market for

• A)chicken wings than in the market for razor blades because the quantity of chicken wings would fall by more than the quantity of razor blades.
• B)chicken wings than in the market for razor blades because the quantity of razor blades would fall by more than the quantity of chicken wings.
• C)razor blades than in the market for chicken wings because the quantity of chicken wings would fall by more than the quantity of razor blades.
• D)razor blades than in the market for chicken wings because the quantity of razor blades would fall by more than the quantity of chicken wings.

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Definitions:

Cash Receipts Journal

An accounting ledger in which all cash inflows or receipts are recorded.

Accounts Payable Subsidiary

A detailed ledger containing all individual creditor accounts, supporting the summary-level accounts payable figure in the general ledger.

Control Account

An account in the general ledger that summarizes and checks the accuracy of individual records in subsidiary ledgers.

General Ledger

A comprehensive set of accounts that records all transactions of a business, providing the foundation for financial statements.