I'm hoping that this question type is so old that I'll never see one like it on today's era of tests, because I do NOT get it at all.
Situation: The gov't of a country taxed gas to try to get people to drive less, and used the money from the tax to subsidize electricity (to reduce electricity prices.)
Analysis: The more successful the first objective, the less successful the second objective will be.
Then you have to match a situation to the analysis. First of all, I don't understand how if reducing driving is successful it automatically means that subsidizing electricity will be less successful. So I really don't understand any of the answer choices. The only ones I was able to eliminate easily were C and D.
3 posts • Page 1 of 1
- Posts: 270
- Joined: Mon Aug 24, 2009 3:26 pm
As people drive less (the first objective), the revenue from the tax on gas would decrease. Therefore, the revenue that could be put towards the electricity subsidy would also decrease, limiting the potential to reduce prices through the subsidy.