Post Utme Abu 2024 Economics Question 25

Practice objective / multiple choice question 25 from the 2024 Post Utme Abu Economics examination.

Post Utme Abu 2024 Economics Objective / Multiple Choice
Question 25 POST_UTME_ABU • 2024 • ECONOMICS • objective

A government is considering a policy to increase the tax rate on luxury goods. The policy is expected to increase tax revenue, but it may also lead to a decrease in demand for these goods. What is the opportunity \cost of implementing this policy?

Answer Options

Correct Answer A. The opportunity \cost is the reduction in tax revenue due to the decrease in demand.
B. The opportunity \cost is the increase in the number of jobs lost in the luxury goods industry.
C. The opportunity \cost is the reduction in the s\tandard of living for high-income individuals.
D. The opportunity \cost is the increase in the s\tandard of living for low-income individuals.
Correct Answer
A
Correct Option:
The opportunity \cost is the reduction in tax revenue due to the decrease in demand.

About This Question

This is Post Utme Abu 2024 Economics Question 25. It is one of the objective questions from the 2024 Post Utme Abu Economics examination.

View More Post Utme Abu 2024 Economics Questions More Post Utme Abu Practice Questions Back to Questions

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Chat with Support