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If the Purpose of a Tax Is to Raise Revenue

Question 7

Multiple Choice

If the purpose of a tax is to raise revenue, it would be best for government to place the tax on which of the following goods?


A) a non-essential good, such as holiday travel
B) a good whose demand curve is highly elastic
C) a good that has several close substitutes
D) a good whose demand curve is highly inelastic
E) a good whose demand curve is unit elastic

Correct Answer:

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