In a Simple Model of the Supply and Demand for Pizza

question 21

Multiple Choice

In a simple model of the supply and demand for pizza, when aggregate income increases, the price of pizza ______ and the quantity purchased ______.

• A) increases; decreases
• B) increases; increases
• C) decreases; increases
• D) decreases; decreases

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Definitions:

Excise Tax

A tax directly levied on certain goods, services, or activities, often included in the price of the product.

Improved Technology

Advances or enhancements in technology that lead to better efficiency, productivity, or outcomes in various fields.

Quantities Supplied

The amounts of goods or services that producers are willing and able to sell at various prices over a certain time period.

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers, leading to a balance in the market.