If a Government Tax Has as Its Purpose the Raising

question 35

Multiple Choice

If a government tax has as its purpose the raising of revenue, it would be best to place the tax on a product which:

• A) is a non-essential.
• B) has a highly elastic demand.
• C) has many good substitutes.
• D) has a highly inelastic demand.

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Definitions:

World Price

The international market price of a good or service, affected by global supply and demand.

World Price

The global market price of a good or service, determined by worldwide demand and supply.

Import

Refers to the acquisition of goods or services from a foreign country for domestic use.

Export

The process of sending goods or services to another country for sale.