Question

The government might levy an excise tax on a product if it wants to collect _________- from the purchase of that particular good or service. The government would prefer to tax goods with a __________ demand. The government might also tax a product to incentivize consumers to _________-. If taxes are too high on a certain good or service, many consumers will ________- that good.

Answer 1

Answer: Tax revenue,highly inelastic,modify,stop buying

Explanation:

The government might levy an excise tax on a product if it wants to collect tax revenue from the purchase of that particular good or service. The government would prefer to tax goods with a highly inelastic demand. The government might also tax a product to incentivize consumers to modify their behavior. If taxes are too high on a certain good or service, many consumers will stop buying that good.