Asked by
Maged Talaat
on Oct 25, 2024
Verified
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
Excise Taxes
Taxes applied to the purchase of specific goods or activities, sometimes used to discourage consumption of certain items.
Deadweight Loss
A loss of economic efficiency that can occur when the equilibrium for a good or service is not achieved or is not achievable.
Revenue
The total amount of money received by a company for goods sold or services provided during a certain time period.
- Establish which goods are subject to the least and most significant deadweight loss because of taxation.
- Recognize the relationship between tax revenue and elasticity of demand and supply.
Verified Answer
DK
Learning Objectives
- Establish which goods are subject to the least and most significant deadweight loss because of taxation.
- Recognize the relationship between tax revenue and elasticity of demand and supply.
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