Post Utme Nile University 2023 Economics Question 18

Practice objective / multiple choice question 18 from the 2023 Post Utme Nile University Economics examination.

Post Utme Nile University 2023 Economics Objective / Multiple Choice
Question 18 POST_UTME_NILE_UNIVERSITY • 2023 • ECONOMICS • objective

The Nigerian government has implemented a tax on imported goods to raise revenue. However, the tax has been criticized for being regressive because it disproportionately affects low-income households. U\sing the concept of elasticity of demand, explain why the tax may be regressive.

Answer Options

Correct Answer A. The tax may be regressive because low-income households have a higher propensity to consume imported goods.
B. The tax may be regressive because low-income households have a lower elasticity of demand for imported goods.
C. The tax may be regressive because low-income households have a higher income elasticity of demand for imported goods.
D. The tax may be regressive because low-income households have a lower income elasticity of demand for imported goods.
Correct Answer
A
Correct Option:
The tax may be regressive because low-income households have a higher propensity to consume imported goods.

About This Question

This is Post Utme Nile University 2023 Economics Question 18. It is one of the objective questions from the 2023 Post Utme Nile University Economics examination.

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