WAEC Economics 2021 Objective — Question 39
Question 39 of 50 from the West African Examinations Council (WAEC) Economics 2021 Objective paper, with the correct answer and a full explanation.
Advertisement
39. In order to enable the government of a country to increase its tax revenue, it will be advisable for it to increase tax on
- A. textile materials with elastic demand.
- B. alcoholic beverages with elastic demand.
- C. agricultural products with inelastic supply.Correct
- D. luxury goods with elastic supply.
Explanation
Taxing goods with inelastic supply (or demand) means quantity sold changes little despite the tax, so tax revenue collected is maximised and more reliable.
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.