« previous next »

Author Question: Which would be a better source of tax revenue for the government, a good with elastic or a good with ... (Read 81 times)

daltonest1984

  • Hero Member
  • *****
  • Posts: 536
on: Jun 29, 2018
Which would be a better source of tax revenue for the government, a good with elastic or a good with an inelastic demand? Explain your reasoning.
 
  What will be an ideal response?

Question 2

Activity aimed at creating artificial barriers to entry into a particular market
 
  A) is rent seeking.
  B) has no social cost.
  C) improves competition.
  D) improves the economy's efficiency.
Foundations of Microeconomics ¦ Bade, Parkin ¦ 8th Edition
Buy Test-Bank


qytan

  • Sr. Member
  • ****
  • Posts: 336
Reply #1 on: Jun 29, 2018
Answer to Question 1

Inelastic goods are better sources of tax revenue because, as price rises, the equilibrium quantity does not decrease by as much as that of a good with elastic demand. The government's tax revenue, which depends on the equilibrium quantity of the good, is larger when a good with an inelastic demand is taxed.

Answer to Question 2

A


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Studies show that systolic blood pressure can be significantly lowered by taking statins. In fact, the higher the patient's baseline blood pressure, the greater the effect of statins on his or her blood pressure.

Did you know?

The ratio of hydrogen atoms to oxygen in water (H2O) is 2:1.

Did you know?

Asthma-like symptoms were first recorded about 3,500 years ago in Egypt. The first manuscript specifically written about asthma was in the year 1190, describing a condition characterized by sudden breathlessness. The treatments listed in this manuscript include chicken soup, herbs, and sexual abstinence.

Did you know?

Although the Roman numeral for the number 4 has always been taught to have been "IV," according to historians, the ancient Romans probably used "IIII" most of the time. This is partially backed up by the fact that early grandfather clocks displayed IIII for the number 4 instead of IV. Early clockmakers apparently thought that the IIII balanced out the VIII (used for the number 8) on the clock face and that it just looked better.

Did you know?

Nearly all drugs pass into human breast milk. How often a drug is taken influences the amount of drug that will pass into the milk. Medications taken 30 to 60 minutes before breastfeeding are likely to be at peak blood levels when the baby is nursing.

This chart illustrates the bottom up assumption about government. In this, attitudes, culture, and This chart illustrates the bottom up assumption about government. In this, attitudes, culture, and
Play in Four Cultures Across cultures, play is the most common activity in early childhood. Source: Play in Four Cultures Across cultures, play is the most common activity in early childhood. Source:
This chart shows the various lines of responsibility and how they differ in presidential and parliam This chart shows the various lines of responsibility and how they differ in presidential and parliam
The learning and retention of the mirrordrawing task by H.M. Despite his good retention of the task, ... The learning and retention of the mirrordrawing task by H.M. Despite his good retention of the task, ...
(a) A turbidometry detector measures laser light directly across from the light source. The sample, ... (a) A turbidometry detector measures laser light directly across from the light source. The sample, ...
Elastic/inelastic #5 Elastic/inelastic #5
Video: What is Reverse Osmosis?

For a complete list of videos, visit our video library