Good a Has a Price Elasticity of Demand of

question 62

Multiple Choice

Good A has a price elasticity of demand of .27, while good B has a price elasticity of demand of 2.9. To raise the most tax revenue, the government should:

• A) place a unit tax on good A.
• B) place a unit tax on good B.
• C) raise the price elasticity of demand for good A.
• D) subsidize the production of good B.

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Definitions:

Computer-Integrated Manufacturing

A system where computer technology is integrated with machinery and software in the manufacturing process to enhance productivity and efficiency.

CAD/CAM

Stands for Computer-Aided Design/Computer-Aided Manufacturing, it's a technology used for designing products and controlling manufacturing processes.

Flexible Manufacturing Systems

Systems designed to easily adapt to changes in the product being manufactured, allowing for more efficient production processes and customization.

Production Planning

The process of organizing the elements of production—such as labor, materials, and equipment—to efficiently produce goods and services.