Mankiw argues that a primary difference between taxing products like gasoline and taxing soda and other sugary drinks is that
a. consumption of gasoline causes negative externalities on society while consumption of soda affects the consumer.
b. the government can generate significant revenue from the gas tax but not from a soda tax.
c. gasoline has inelastic demand but soda has elastic demand.
d. Both a and c are correct.
a
You might also like to view...
A trade policy designed to alleviate some domestic economic problem by exporting it to foreign countries is know as a(n)
A) international dumping policy. B) countervailing tariff policy. C) beggar thy neighbor policy. D) trade adjustment assistance policy. E) redistribution quota policy.
Exhibit 3A-2 Comparison of Market Efficiency and Deadweight Loss
As shown in Exhibit 3A-2, if the market is in equilibrium, then total surplus is represented by
A. BGHF B. CBEFDA C. CBEA D. AEFD
Which of the following is not a common characteristic of oligopolistic firms?
a. high barriers to entry b. mutual interdependence c. a large number of sellers d. nonprice competition
Deadweight loss occurs when
A) producer surplus is greater than consumer surplus. B) the maximum level of total welfare is not achieved. C) consumer surplus is reduced. D) an inferior good is consumed.