JAMB Economics 2021 Objective — Question 3
Question 3 of 40 from the Joint Admissions and Matriculation Board (JAMB) Economics 2021 Objective paper, with the correct answer and a full explanation.
Advertisement
3. Which of the following will increase government revenue a. Increasing tax on price elastic goods b. Increasing tax on perfectly elastic goods c. Increasing tax on unitary elastic goods d. Increasing tax on price inelastic goods
- A. Increasing tax on price elastic goods
- B. Increasing tax on perfectly elastic goods
- C. Increasing tax on unitary elastic goods
- D. Increasing tax on price inelastic goodsCorrect
Explanation
For inelastic goods, quantity demanded barely falls when price (tax) rises, so total revenue collected increases. Elastic goods would see demand fall sharply, reducing revenue.
Advertisement
Sign up free to unlock
- Score tracking
- Practice history
- Saved questions
- Progress dashboard
- Personalized sessions
- Weak-topic breakdown
…and/or go further with premium services and No Ads.