7. The people of Prohibitionland are considering banning the service of alcoholic
beverages in restaurants to curb unruly behavior on the part of its residents.
Proprietors of restaurants in Prohibitionland are protesting the ban on the
grounds that it will reduce their revenues and profits. However, several
provinces in Prohibitionland enacted restrictions on alcoholic beverages last
year, and the sales taxes paid by the restaurants in those provinces rose by
an average of 50 percent. In contrast, the sales taxes paid by restaurants
located in areas of Prohibitionland that did not have any restrictions rose by
an average of 30 percent. Which of the following, if true, supports the
restaurant proprietors’ economic stance against the ban?
• In the provinces that restricted alcoholic beverages, there was a short-term
negative impact on restaurant visitation in the beginning of last year.
• The sales tax in Prohibitionland is lower on food and beverages than it is on
other consumer goods, such as clothing.
• The consumption of alcoholic beverages in Prohibitionland has been on a
gradual decline the last 20 years.
• The restrictions on alcoholic beverages enacted last year allowed for the
service of drinks beginning around dinnertime each evening.
• Overall sales tax revenue did not increase at a substantially higher rate in the
provinces that enacted the restrictions on alcoholic beverages than in the rest
of Prohibitionland last year.
Please explain.
OA is d
beverages in restaurants to curb unruly behavior on the part of its residents.
Proprietors of restaurants in Prohibitionland are protesting the ban on the
grounds that it will reduce their revenues and profits. However, several
provinces in Prohibitionland enacted restrictions on alcoholic beverages last
year, and the sales taxes paid by the restaurants in those provinces rose by
an average of 50 percent. In contrast, the sales taxes paid by restaurants
located in areas of Prohibitionland that did not have any restrictions rose by
an average of 30 percent. Which of the following, if true, supports the
restaurant proprietors’ economic stance against the ban?
• In the provinces that restricted alcoholic beverages, there was a short-term
negative impact on restaurant visitation in the beginning of last year.
• The sales tax in Prohibitionland is lower on food and beverages than it is on
other consumer goods, such as clothing.
• The consumption of alcoholic beverages in Prohibitionland has been on a
gradual decline the last 20 years.
• The restrictions on alcoholic beverages enacted last year allowed for the
service of drinks beginning around dinnertime each evening.
• Overall sales tax revenue did not increase at a substantially higher rate in the
provinces that enacted the restrictions on alcoholic beverages than in the rest
of Prohibitionland last year.
Please explain.
OA is d
