Question

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. Given statement states that on every friday parishionars would not eat red meat and this would lead to more red meat for others,when such a decision would be taken ,demand will reduce for red meat,it will not simply be compensated by poor or someone else eating more,over long period,production of red meat will simply reduce,which means as demand decreases supply will also decrease and equilibrium quantity will also decrease,so given statement that there will be more red meat for poor is False.,so correct answer is option b) False.
2. Now,red meat 's consumption is reduced,so people will switch to other sources of protein and thereby increasing demand and subsequently increasing price for these other sources,so price of red meat comparitively will not increase,instead it would be price of these other sources of protein which will comparitively increase benefitting from reduction in demand and supply of red meat,so correct answer is b) False.

Answer is complete.Thank you!