How Successful Would a $1 Excise Tax on Each Little

question 152

Multiple Choice

How successful would a $1 excise tax on each Little Caesar's pizza be in generating revenue if Little Caesar's is the only pizza chain that is taxed?

• A) Many people like Little Caesar's,so demand is inelastic and the tax revenue generated will be large.
• B) You can get pizza at many other places,which makes the demand for Little Caesar's relatively elastic and,as a result,the tax revenue collected will be small.
• C) The supply of Little Caesar's pizza is perfectly inelastic,so this tax would not generate any revenue.
• D) The demand for Little Caesar's pizza is perfectly elastic,so the tax will not generate any revenue.
• E) The supply of Little Caesar's pizza is perfectly elastic,so this tax will generate the maximum amount of revenue.

---

Definitions:

Unpleasant Truth

A fact or reality that is difficult to accept or confront due to its distressing, uncomfortable, or disagreeable nature.

Reaction Formation

A psychological defense mechanism where an individual acts in a manner opposite to their actual feelings.

Social Zone

A spatial concept in social psychology referring to the comfortable distance for interactions among acquaintances or in professional settings.

Coworkers

Coworkers are individuals who work together in the same organization or on the same team, often sharing tasks, goals, and workplace challenges.