Question

True or False. [2 questions] PLEASE EXPLAIN WHYYYY

1.   An article in the Wall Street Journal on Friday May 27, 2011 titled “The Return of Meatless Friday”, discusses the sociological aspects of a recent announcement by the bishops of the catholic church in England and Wales. The bishops asked their parishioners to abstain from red meat every Friday for the entire year; not just during Lent. Some have claimed that if English and Welsh catholics reduce consumption of red meat by 5 tons every Friday, there would then be 5 tons more meat each week for others, including the poor, to eat. Assuming a typical upward sloping supply curve and downward sloping demand curve, over the long term, is the statement true or false?

      a.   True                                        b.         False

2.   With reference to question 1, if consumption of red meat is reduced, then over the long term, the price of red meat relative to other sources of protein, such as fish and poultry, will increase.

      a.   True                                        b.         False

Answer 1

Answer 1

FALSE

Reason: The demand curve is a normal downward sloping one. When the demand for Meat falls, the demand curve moves backwards. Thus, price falls and equilibrium quantity also falls. Therefore, there would be no extra/ more meat for the poor and others.

Answer 2

FALSE

Reason: If consumption of red meat is reduced, then over the long term, the price of red meat relative to other sources of protein, such as fish and poultry, will decrease. This is because the quantity demanded is less than supplied, which means there is a surplus. A surplus causes the prices to fall.