WAEC Economics 2013 Objective — Question 31
Question 31 of 50 from the West African Examinations Council (WAEC) Economics 2013 Objective paper, with the correct answer and a full explanation.
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A government that wants to get more revenue will increase the tax on commodities with a
- A. high price elasticity of demand
- B. low price elasticity of demandCorrect
- C. high income elasticity of demand
- D. low income elasticity of demand
Explanation
A government seeking more revenue taxes commodities with low price elasticity of demand — since demand barely falls when price rises, people keep buying and revenue rises.
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