All of the Following Statements About Legalizing and Taxing Drugs

question 4

Multiple Choice

All of the following statements about legalizing and taxing drugs are true except

• A)legalizing and taxing drugs would eliminate the black market in drugs.
• B)the quantity of a drug bought could be decreased if the drug was legalized and taxed.
• C)a sufficiently high tax could be imposed to decrease supply,raise the price,and achieve the same decrease in the quantity bought as with a prohibition of drugs.
• D)an extremely high tax rate would be needed to cut the quantity of drugs bought to the level prevailing with a prohibition.
• E)tax revenue can be used to make law enforcement more effective.

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Definitions:

Political Engagement

The active participation of individuals in political activities or processes to influence public policy or decision-making.

Public Good

An item or service delivered at no cost to all individuals in a society, facilitated by either public authorities or a charitable organization or person.

Rival in Consumption

A characteristic of a good where its consumption by one person reduces its availability for another person.

Substitutes

Goods or services that can replace each other in use or consumption, where an increase in the price of one leads to an increase in demand for the other.