To raise the most tax revenue, governments should tax which of the following goods?

Question

Quizplus · Accepted Answer

Gasoline is typically heavily used and inelastic in demand, meaning that even if its price goes up, people will continue to buy it because they need it for transportation. Therefore, a tax on gasoline would likely generate a significant amount of revenue for the government. SUVs, designer shoes, and sofas are not as necessary for daily life and may have more elastic demand, meaning that a tax on these goods may not generate as much revenue.

To Raise the Most Tax Revenue, Governments Should Tax Which