The State Legislators Are Looking to Increase Revenue in Your

question 4

Multiple Choice

The state legislators are looking to increase revenue in your state to fund required programs. Because it generates the most income for states, what type of tax will they most likely try to raise?

• A) Income
• B) Farm subsidy
• C) Gasoline
• D) General sales
• E) Property

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Definitions:

Economies of Scale

The advantages in cost that companies receive owing to their operational magnitude, with the expense per produced unit generally diminishing as the scale of operations broadens.

Natural Monopoly

A market condition where the cost of production is minimized by having a single firm produce the product, due to high fixed or startup costs.

Demand Schedules

A table that shows the quantity demanded of a good or service at different price levels.