Statement: The government has increased taxes on luxury cars to boost revenue. Conclusions: I. Luxury cars will become more expensive for buyers. II. Revenue of the government will definitely increase. Which conclusion(s) logically follow? MCQ with Answer and Explanation
Statement:
The government has increased taxes on luxury cars to boost revenue.
Conclusions:
I. Luxury cars will become more expensive for buyers.
II. Revenue of the government will definitely increase.
Which conclusion(s) logically follow?
A. Only conclusion I follows
B. Neither I nor II follows
C. Only conclusion II follows
D. Both I and II follow
Answer: Option A
Solution (By JKSSB Mock Tests)
Increasing taxes on a product directly increases its final cost to the buyer, so I follows. However, an increase in tax does not guarantee an increase in overall revenue, as sales volume might drop significantly. Therefore, II is not a definite conclusion.
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