Question

In an effort to deter e-cigarette consumption by youths, banning flavored e-cigarettes causes a _____ the demand curve for e-cigarettes , while raising the federal per unit tax one-cigarettes would cause a _____ the demand curve. (explanation please)

movement along; decrease in

decrease in; movement along

movement along; increase in

   

increase in ; movement along

Answer 1

The correct option would be

• decrease in ; movement along

Banning flavored product would not affect the supply, and would affect the demand. As the product is banned, the demand would decrease, and would shift left, reflecting the fact the for the same price as before less is demanded. The imposition of tax would, however, would not affect demand, as the tax would be imposed on the suppliers. As a result, the supply would shift to left. as that happens, the change in demand would be along the demand curve, due to the change in supply.