To Minimize Inefficiency from Taxes on Goods

question 51

Multiple Choice

To minimize inefficiency from taxes on goods,

• A)a good with low elasticity of demand should be taxed at the same rate as a good with high elasticity of demand.
• B)a good with low elasticity of demand should be taxed at a lesser rate than a good with high elasticity of demand.
• C)a good with low elasticity of demand should be taxed at a greater rate than a good with high elasticity of demand.
• D)a good with low elasticity of demand should never be taxed.
• E)the government should always impose the maximum amount of tax.

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