Taxing a Good with Very Elastic Demand Generates More Deadweight

question 57

Multiple Choice

Taxing a good with very elastic demand generates more deadweight loss than taxing a good with very inelastic demand because

• A) the amount of the tax is larger.
• B) the change in consumer behavior is greater.
• C) consumers have to pay these taxes out of pocket.
• D) the change in consumer behavior is smaller.
• E) the government does not bother collecting the revenue.

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Definitions:

Indian Society

is the societal structure and cultural patterns found within India, characterized by a rich diversity of religions, languages, customs, and traditions.

Economic Values

The principles or standards guiding the worth of activities, goods, services, and transactions in an economic system, often influencing production, distribution, and consumption decisions.

Economic Activity

Engagements and actions that involve the production, distribution, and consumption of goods and services within an economy.

Puritan Control

The influence or governance exercised by Puritans, especially in early American colonial settlements, characterized by strict religious conformity and moral codes.