You are a policy maker who is interested in increasing tax revenues in order to reduce the Federal budget deficit. One proposal that has been suggested is to increase excise taxes on certain goods. Some of the options suggested are: vacation travel such as cruises liquor and cigarettes gasoline theater and concert tickets Based on your knowledge of elasticity of demand, which items would you choose? Explain.

Answer rating: 100% (QA)

To determine which goods would be most suitable for increasing excise taxes we need to consider the concept of price elasticity of demand Price elasti... View the full answer