If the price elasticity of demand for a good is 3.0, it is clear that the good
a. would be a poor choice to tax if the object is to raise tax revenue
b. would be an excellent choice to tax if the object is to raise revenue
c. is an essential good
d. has a demand curve that is price inelastic at every price level
e. is a complementary good
A
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If tuition at a college is $30,000 and the external benefit of graduating from this college is $10,000, then
i. in the absence of any government intervention, the number of students graduating is less than the efficient number. ii. the government could increase the number of graduates by giving the college a $10,000 subsidy per student. iii. the government could increase the number of graduates by giving the students $10,000 vouchers. A) i only B) i and ii C) i and iii D) ii and iii E) i, ii, and iii
Gasoline taxes are usually used in part to finance the road and highway repair and new construction. Which principle of taxation does this type of tax most fit and why?
What will be an ideal response?