Economics 9708 · AS & A Level · Short-run costs

Short-run costs — practice question

In a country, the normal sales tax rate is 10%, although food is exempt from tax and luxury goods are taxed at 20%. The table gives the spending patterns of three family types. Which option correctly describes the sales taxes in this country?

  • Atax on standard-rated goods progressive; tax on luxury goods regressive; tax on all goods progressive
  • Btax on standard-rated goods progressive; tax on luxury goods regressive; tax on all goods regressive
  • Ctax on standard-rated goods regressive; tax on luxury goods progressive; tax on all goods regressive
  • Dtax on standard-rated goods regressive; tax on luxury goods progressive; tax on all goods progressive

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