If Demand and Supply Are Both Very Inelastic,a Decrease in the Rate

question 194

Multiple Choice

If demand and supply are both very inelastic,a decrease in the rate of an excise tax will likely:

• A)decrease government revenue.
• B)increase government revenue.
• C)not affect government revenue.
• D)make demand and supply both elastic.

---

Definitions:

Time Spent Fishing

The duration allocated or utilized in the act of catching fish either for leisure or commercial purposes.

Vegetarian

A dietary practice of abstaining from the consumption of meat and sometimes, by extension, other animal products.

Regression Discontinuity

Regression discontinuity identifies the causal effects of a policy or factor by looking at two samples that lie on either side of a threshold or cutoff.

Causal Effects

Causal effects refer to the change in an outcome directly attributable to a change in a factor or intervention, established through methods that isolate this relation from other variables.