The Demand for Bread Is Less Elastic Than the Demand

question 193

True/False

The demand for bread is less elastic than the demand for donuts; hence, a tax on bread will create a larger deadweight loss than will the same tax on donuts, other things equal.

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Definitions:

Open Delta

A method of transformer connection in a three-phase system using only two transformers to provide a delta connection, saving cost but reducing power capacity compared to a full delta configuration.

Single-Phase Transformers

Transformers designed to operate on an electrical system using a single alternating current (AC) phase, commonly used in residential and light commercial applications.

Primary Line Voltage

The voltage applied to the primary winding of a transformer or the initial voltage in a power distribution line before any step up or step down transformations.

Secondary Line Voltage

The voltage present in the output (secondary) side of a transformative device, typically less than the input (primary) voltage.