A Tax on a Good Whose Demand Is Price Elastic

question 148

True/False

A tax on a good whose demand is price elastic will be effective in discouraging consumption of that good.

---

Definitions:

Level Of Significance

The threshold set by researchers to determine the probability below which a null hypothesis will be rejected, indicating statistical significance.

Hypothesized Proportion

It refers to a specific proportion value that is being tested for in statistical hypothesis testing, representing the assumed success rate or proportion in the population.

Sample Proportion

The fraction of the sample that represents a particular outcome or attribute.

Test Statistic

A measurement derived from sampled data in a hypothesis test, employed to decide if the null hypothesis should be dismissed.