Suppose That the Elasticity of Demand for Insulin Is 0

question 40

Multiple Choice

Suppose that the elasticity of demand for insulin is 0.1,the elasticity of demand for oranges is 1.2,and the elasticity of supply for insulin and oranges is 0.4.If the government imposes a 10 percent tax on both insulin and oranges,the decrease in the quantity of oranges is ________ the decrease in the quantity of insulin.

• A) larger than
• B) smaller than
• C) equals to
• D) not comparable to
• E) More information is needed to determine how the decrease in the quantity of oranges compares to the decrease in the quantity of insulin.

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Definitions:

Chocolate Truffle

A type of chocolate confectionery, traditionally made with a chocolate ganache center coated in chocolate, cocoa powder, or chopped toasted nuts.

Absolute Advantage

The ability of an individual, company, or country to produce a good or service more efficiently than its competitors with the same amount of resources.

World Production

encompasses the total output of goods and services by all economies across the globe over a specific period.

Self-Sufficient

The ability to fulfill all of one's needs without relying on external assistance.