If the Number of Highway Deaths Among Young People Is

question 213

Multiple Choice

If the number of highway deaths among young people is roughly proportional to their beer consumption and young peoples' elasticity of demand for beer is 1.5, then to decrease highway deaths of young people by 15 percent, taxes would need to be increased enough to increase the price of beer by

• A) 1%.
• B) 1.5%.
• C) 10%.
• D) 15%.

---

Definitions:

Income

Financial gains obtained regularly as a result of working or investing.

Imputed Interest Rules

IRS rules that assign a market-rate interest value to certain transactions where no interest or an unrealistic amount of interest is charged.

Personal Residence

A dwelling where an individual lives for the majority of the tax year, which can include a house, apartment, trailer, or boat.

Sale of Property

The act of transferring ownership of real estate or personal property from one party to another for a price.