Excise Taxes That Raise the Most Revenue and Cause the Least

question 242

Multiple Choice

Excise taxes that raise the most revenue and cause the least deadweight loss are likely to be levied on goods for which demand is _____ and supply is _____.

• A) inelastic; elastic
• B) inelastic; inelastic
• C) elastic; inelastic
• D) elastic; elastic

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Definitions:

Courage

The ability to confront fear, pain, danger, uncertainty, or intimidation.

Empiricism

A philosophical standpoint that emphasizes the role of experience and evidence, especially sensory perception, in the formation of ideas, over the notion of innate ideas or traditions.

Direct Observation

A method of collecting data by watching subjects in their natural environment without any manipulation or interference.

Logical Reasoning

The process of using a logical sequence of thinking, utilizing deductive or inductive reasoning, to arrive at a conclusion or solve problems.