Good A has a price elasticity of demand of .27, while good B has a price elasticity of demand of 2.9. To raise the most tax revenue, the government should:
A. place a unit tax on good A.
B. place a unit tax on good B.
C. raise the price elasticity of demand for good A.
D. subsidize the production of good B.
Answer: A
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A) only the raw wool and the yarn. B) only the yarn and the sweaters. C) the raw wool, the yarn and the sweaters. D) only the sweaters.
In the above figure, the curve labeled a is the ________ curve and the curve labeled b is the ________ curve
A) marginal cost; marginal benefit B) marginal cost; trade line C) marginal benefit; trade line D) production possibilities frontier; trade line
In a city that has rent control for apartments, there is
A) less turnover of apartments. B) a surplus of apartments available to rent. C) a shortage of renters in the city. D) neither a surplus nor a shortage of apartments.
If the game continues for infinity, then the new Nash Equilibrium is a. for one firm to charge a HP forever
b. for your firm charge a LP when the other firm does. c. for each firm to charge HP so long as the rival does, otherwise charge a LP. d. for each firm to charge LP until the rival does, and then to charge a HP forever.