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If the Main Purpose of a Tax Is to Decrease

question 10

Multiple Choice

If the main purpose of a tax is to decrease the amount of a harmful activity,such as underage drinking,the government should impose it on harmful activities whose supply is _____ and demand is _____.


Definitions:

Equation

A mathematical statement that asserts the equality of two expressions.

Straight Line

In economics, often represents a simple linear relationship in models, such as the budget constraint in consumer theory.

Substitute Goods

Products or services that can be used in place of each other, affecting demand when the price of one changes.

Papayas

No real economic definition; presumably referring to the tropical fruit as a commodity in the context of trade, agriculture, or market pricing.

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