4. If the government levied a luxury tax on homes with more than 2,500 square feet of space, what is
most likely to happen?
A. Such homes would be bought and sold in the underground economy.
B. Local property taxes on those homes would drop to keep demand high.
C. Construction of those homes would not decrease because supply is inelastic.
D. more resources would be allocated to the building of 2,400-square-foot homes.
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4. If the government levied a luxury tax on homes with more than 2,500 square feet of space, what is...
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