If the Government Is Interested in Generating a Large Revenue

question 3

Multiple Choice

If the government is interested in generating a large revenue from placing a tax on the consumption of a particular good, it should choose a good for which

• A)the demand is price elastic
• B)the demand is unit elastic with respect to price
• C)the supply is perfectly elastic
• D)the demand is price inelastic
• E)there are many good substitutes

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Definitions:

Rate

A rate is a measure, quantity, or frequency, typically one measured against another quantity or measure, such as speed (distance per time) or heart beats (per minute).

100,000

A numerical figure commonly used as a statistical baseline to calculate rates per population for comparison or analysis.

Suicide Attempt

An act with the intention to end one's life that does not result in death.

Gone Awry

A phrase used to describe something that has gone wrong or deviated from the intended or expected course.