Governments can use price elasticity of demand to estimate how changes in excise tax rates will affect:
a. income.
b. prices.
c. tax revenues.
d. government spending.
e. profits.
c
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The quantity of iPads that people plan to buy this month depends on all of the following EXCEPT the
A) price of a rival's tablet. B) price of an iPad. C) the technology used to produce an iPad. D) price of apps.
When the price of milk goes up as a result of a rightward shift of the demand curve for milk, the total revenue collected by milk producers will
A) increase only if milk is inelastic in supply. B) decrease only if milk is elastic in supply. C) remain constant only if milk has a unitary price elasticity of supply. D) none of the above
Economist Steve Landsburg has pointed out that Ebenezer Scrooge's change in behavior from miser to spender might actually be detrimental to the economy because
A) saving has to be greater than consumption for the economy to grow. B) Scrooge was happiest when he was saving money, and happiness is the key to economic growth. C) Scrooge's miserly saving helped contribute to the production of investment goods rather than consumption goods. D) Scrooge's consumption habits were more detrimental to the environment than were his earlier saving habits.
One reason for the controversy surrounding the decision by the European Central Bank to buy Greek bonds was that:
A) it may increase moral hazard by encouraging other European governments to issue more debt than private investors were willing to buy B) it may increase adverse selection by encouraging other European governments to issue more debt than private investors were willing to buy C) it may result in higher risk premiums as private investors anticipate a default by Greece D) it may worsen the Greek recession by increasing Greek interest rates