In Order to Discourage Consumers from Eating Unhealthy Fast Food

question 58

Multiple Choice

In order to discourage consumers from eating unhealthy fast food, the government is considering placing a tax on all fast food sales. Which of the following statements is true?

• A) Given the numerous alternatives, consumers' demand for fast food is relatively inelastic and the tax will not likely work to discourage fast food consumption.
• B) The tax on fast food will likely raise considerable revenue but will be unlikely to reduce the consumption of fast food by consumers.
• C) The tax on fast food will likely increase the demand for home cooked meals.
• D) A tax on fast food will only be effective if demand is perfectly inelastic.

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Definitions:

Risk Passes

A term used in sales and contract law signifying the point at which the risk of loss or damage to goods transfers from the seller to the buyer.

Destroyed Goods

Items or products that have been damaged to the point where they can no longer serve their intended purpose.

Commercial Reasonableness

Reasonable commercial standards of fair dealing, required of merchants in addition to honesty in fact.

Fair Dealing

A legal doctrine that allows for limited use of copyrighted material without permission from the copyright holder, typically for purposes of criticism, review, or education.