Government Wants to Maximize Its Tax Revenue and It Can

question 103

Multiple Choice

Government wants to maximize its tax revenue and it can only place a $2 per-unit tax on one of two goods. It should place the tax (on the production) of the good whose demand curve has the

• A)higher price elasticity of demand.
• B)lower price elasticity of demand.
• C)greater length.
• D)shorter length.
• E)a or c

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Definitions:

PR Column

Likely refers to a reference or designation in accounting or bookkeeping but insufficient context for a precise definition. Could potentially mean "Posting Reference" column used to track entries in ledgers.

Sales Tax

A tax levied by a government on the sale of goods and services, collected by the retailer at the point of sale and passed on to the government.

Merchandise

Goods that are purchased for resale at a profit.

Asset Account

An account that records all financial transactions related to a company's assets, including current and fixed assets.