In 2005, Ireland began taxing residents on how much garbage they threw away in an effort to promote recycling. In response, residents began burning trash (which is environmentally more harmful and resulted in an increase in burn victims as people accidentally set themselves on fire). This story suggests that the elasticity of demand for trash collection was more ______ than lawmakers believed because ______ than previously thought.
A) elastic; the tax took up a larger part of residents' budgets
B) elastic; there were more substitutes for trash collection
C) inelastic; the tax took up a smaller part of residents' budgets
D) inelastic; there were fewer substitutes for trash collection

Question

Quizplus · Accepted Answer

The story suggests that residents had more substitutes for trash collection than lawmakers believed, as they chose to burn their trash instead. This indicates that the elasticity of demand for trash collection was higher, making option B the correct answer.

In 2005, Ireland Began Taxing Residents on How Much Garbage