8. Shifts in supply or demand IThe following graph plots the market for scones in Dallas, where there are always over 1,000 bakeries. Suppose the municipal government sharplyincreases local taxes, making it significantly more expensive to reside within Dallas city limits. Many residents decide to leave the city altogether forareas with lower local tax rates.Show the effect of this change on the market for scones by shifting one or both of the curves on the following graph, holding all else constant.Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps backto its original position, just drag it a little farther.PRICE (Dollars per scone)SupplyDemand0Demand1C1Supply Show the effect of this change on the market for scones by shifting one or both of the curves on the following graph, holding all else constant.Note: Select and drag one or both of the curves to the desired position, Curves will snap into position, so if you try to move a curve and it snaps backto its original position, just drag it a little farther.PRICE (Dolars per scone)QUANTITY (Soones)SupplyDemand10If scones are a normal good, this will cause the demand for scones toDemandSupplyNow suppose Congress passes a tax cut that increases the income of Dallas residents.

It can be described as the products for which demand rises as the incomes of consumers increase and…

Answered: Now suppose Congress passes a tax cut…

Now suppose Congress passes a tax cut that increases the income of Dallas residents. If scones are a normal good, this will cause the demand for scones to

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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