Question

suppose that the government wants to reduce cigarette smoking. it decides it will impose a $3...

suppose that the government wants to reduce cigarette smoking. it decides it will impose a $3 per pack of cigarette tax. this tax will be ineffective because heavy smokers have demand curves that are:

A. Relatively inelastic
B. Relatively Elastic
C. Perfectly Elastic
D. what's a demand curve

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The tax will be ineffective on the heavy smokers of cigarettes because the demand curve of heavy smokers is (A) relatively inelastic.

Their demand curve is inelastic because cigarette smoking is their habit and it's is like a necessity to them. Demand curves of things that are habitual and necessary, is inelastic demand curve. That is, it's demand is not affected by the price. Whether the price increase , it's demand remains unaffected. Demand curve of things like.l medicines is also inelastic as it is a necessity.

On the other hand, elastic demand curve is of commodities whose demand is affected by the price like luxury commodities. It could be perfectly elastic that is, demand and price changes in same ratio, or relatively elastic which means price and demand changes in different ratios.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Suppose the government wants to increase the incomes of pecan farmers and decides to impose a...
Suppose the government wants to increase the incomes of pecan farmers and decides to impose a price floor on pecans. Is this program more likely to meet the government’s objective when price elasticity of demand for pecans is elastic or inelastic? Qualitatively, how will consumer, producer, and total surplus be affected if demand is inelastic? Explain.
3) Suppose a $4/unit tax is placed on a good. If the original equilibrium is (P...
3) Suppose a $4/unit tax is placed on a good. If the original equilibrium is (P = $20, Q = 1000) and the new equilibrium is (P = $21, Q = 800), what is the consumer tax burden? Group of answer choices a $2400 b $1000 c $3200 d $800 4) Suppose the demand curve for cigarettes is extremely inelastic (relatively steep). If the government decides to increase its revenue by taxing cigarette sales, will consumers or producers pay a...
the government decides to reduce air pollution by reducing the use of petrol it imposes ZAR0...
the government decides to reduce air pollution by reducing the use of petrol it imposes ZAR0 50 tax for each litre of petrol sold. a. should it impose this tax on petrol companies or motorists, explain using a supply and demand diagram. b. if the demand for petrol were more price elastic , would this tax be more effective or lee effective in reducing the quantity of petrol consumed, explain using relevant diagrams. c. are consumers of petrol helped or...
If the government decides to impose a tax of 20 cents per liter on petrol, illustrate...
If the government decides to impose a tax of 20 cents per liter on petrol, illustrate the impact of the tax on market equilibrium price, and discuss whether the outcome is efficient by demonstrating the change of consumer’s and producer’s surplus as a result of tax . - Draw a demand and supply model with demand curve - Show the shift of S as a result of 20 cent tax. - Mark the price paid by consumer and received by...
3. a. Suppose Congress decides to reduce the budget deficit by cutting government spending. a. Use...
3. a. Suppose Congress decides to reduce the budget deficit by cutting government spending. a. Use the Keynesian-cross model to illustrate graphically the impact of a reduction in government purchases on the equilibrium level of income. Be sure to label: i. the axes; ii. the curves; iii. the initial equilibrium values; iv. the direction the curve shifts; and v. the terminal equilibrium values. b. Explain in words what happens to equilibrium income as a result of the cut in government...
Suppose officials in the U.S. want to reduce the national cigarettes consumption from the current 400...
Suppose officials in the U.S. want to reduce the national cigarettes consumption from the current 400 billion to 300 billion cigarette packs per year. They propose two workable solutions that would each bring about such a reduction of 100 billion cigarette packs sold and purchased. Option 1 is to place a tax on every cigarette pack sold. Option 2 is to impose a price floor on what consumers have to pay for a pack of cigarettes. (a) Provide a separate...
Suppose the US government decides vaping is worse for your health than smoking cigarettes. Working together,...
Suppose the US government decides vaping is worse for your health than smoking cigarettes. Working together, the US Congress and the President decide to impose a significant increase in taxes and regulation on the vaping industry. Assume consumers consider vaping and cigarettes as "substitute goods." Which of the following statements is most likely to occur? Group of answer choices a.Supply of vaping products will decrease and demand for cigarettes will decrease b.Supply of vaping products will increase and demand for...
1. If property rights are clearly defined and transaction costs are low, the free rider problem...
1. If property rights are clearly defined and transaction costs are low, the free rider problem may still prevent mutually beneficial trades from taking place. the possibility of trade means that all costs and benefits will be taken into account, so there will be no externalities. the possibility of trade means that only positive externalities will occur. there will still be some externalities, because property rights have only to do with ownership. 2. An incumbent president can take advantage of...
Suppose Congress decides to reduce the budget deficit by cutting government spending. Use the Keynesian-cross model...
Suppose Congress decides to reduce the budget deficit by cutting government spending. Use the Keynesian-cross model to illustrate graphically the impact of a reduction in government purchases on the equilibrium level of income. Be sure to label: 1) the axes; 2) the curves; 3) the initial equilibrium values; 4) the direction the curve shifts; 5) the terminal equilibrium values.
Public policymakers often want to reduce the amount that people smoke. There are two ways that...
Public policymakers often want to reduce the amount that people smoke. There are two ways that policy can attempt to achieve this goal. One way to reduce smoking is to shift the demand curve for cigarettes and other tobacco products. Public service announcements, mandatory health warnings on cigarette packages, and the prohibition of cigarette advertising on television are all policies aimed at reducing the quantity of cigarettes demanded at any given price. If successful, these policies shift the demand curve...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT