Good a Has a Price Elasticity of Demand of

Multiple Choice

Good A has a price elasticity of demand of .27, while good B has a price elasticity of demand of 2.9. To raise the most tax revenue, the government should:

A) place a unit tax on good A.
B) place a unit tax on good B.
C) raise the price elasticity of demand for good A.
D) subsidize the production of good B.
E) cut its spending for various social programs.