If the Government Wanted to Curb Consumption of Alcohol by Taxing

question 27

Multiple Choice

If the government wanted to curb consumption of alcohol by taxing alcohol without hurting consumer's welfare it would

• A)raise the tax on alcohol until demand for alcohol became elastic.
• B)need to know the substitution effect but not the income effect of a tax hike.
• C)need to know the income effect but not the substitution effect of a tax hike.
• D)tax until the income effect of the price increase, which would be refunded, is exactly equal to the revenue gained from the tax.

---

Definitions:

Salesman

An individual who sells products or services, often directly to consumers or businesses, with the aim of achieving sales targets and generating revenue.

Routinely Used Clichés

Phrases or expressions that have been overused to the point of losing their original meaning or effectiveness, often considered a sign of weak or unoriginal thinking.

Human Relations

The study and management of how individuals and groups interact within organizations, often focusing on enhancing workplace relationships and morale.

Denotative Words

Denotative Words convey the explicit, literal, or dictionary meaning of a term, as opposed to its connotations or the feelings it may evoke.