passwella.
Menu

WAEC Economics 2011 Question 43

Question 43

Public Finance

When governments want to discourage consumption, they tax goods whose demand is

  1. A.price inelastic.
  2. B.abnormal in nature.
  3. C.price elastic.
  4. D.normal in nature.
Show the answer and explanation

Answer: C (price elastic.)

Explanation

When demand is elastic, the price rise caused by a tax makes consumption fall sharply.