Economics Multiple Choice Question – 27 December 2021

Doctors are concerned about the negative health effects of high-caffeine drinks.

When would a tax on high-caffeine drinks be LEAST effective in improving health?

Select ONE answer:

1. when the demand for high-caffeine drinks is income elastic
2. when the demand for high-caffeine drinks is income inelastic
3. when the demand for high-caffeine drinks is price elastic
4. when the demand for high-caffeine drinks is price inelastic

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Economics KS4 and KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct

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