It is possible for the United States to compete against cheap foreign labor because expensive domestic workers

The last time the U.S. Post Office raised its prices for mail service critics of the rate increase argued that the Post Office's revenues would actually decline as a result of the price increase. It can be concluded that:

A) both groups believe demand is elastic, but for different reasons. B) both groups believe demand is inelastic, but for different reasons. C) the Post Office believes demand for mail service is elastic; opponents of the price increase believe demand is inelastic. D) the Post Office believes demand for mail service is inelastic; opponents of the price increase believe demand is elastic.

In the country of Bora Bora, consumers buy large quantities of alcohol, tobacco, and coffee. Last year, the prices of these goods each increased by 10 percent. The quantities demanded for these goods fell by 10, 3, and 8 percent, respectively. If the government is thinking about imposing a unit tax on one of these goods, which good should they choose to tax to raise the most tax revenue, and why?

a. alcohol; because the price elasticity is highest b. tobacco; because the price elasticity is lowest c. coffee; because it will have the lowest tax elasticity d. tobacco; because it will have the highest tax elasticity e. alcohol; because the burden of taxation would be more even