Asked by Jaynese Jones on May 10, 2024
Verified
If the demand for cigarettes is more ________ for underage smokers as compared to that of adult smokers, then compared to adults, a tax on cigarettes would have ________ impact on the demand for cigarettes for teenagers.
A) elastic; more
B) elastic; less
C) inelastic; more
D) inelastic; an equal
Underage Smokers
Individuals below the legal age who engage in smoking tobacco products.
Adult Smokers
Individuals over the legal adult age who consume tobacco products through the act of smoking.
Elastic
A term used in economics to describe a situation where the demand for a good or service greatly changes in response to a change in price.
- Study how elasticity impacts the demand and supply for labor, including the consequences of altering wage levels.
- Recognize the behavioral implications of elasticity in public policy, such as the effectiveness of sin taxes.
Verified Answer
MB
Mohammed BrilliantMay 11, 2024
Final Answer :
A
Explanation :
If the demand for cigarettes is more elastic for underage smokers, it means their demand is more sensitive to price changes. Therefore, a tax increase (which raises prices) would have a more significant impact on reducing demand among teenagers compared to adults, whose demand might be less elastic.
Learning Objectives
- Study how elasticity impacts the demand and supply for labor, including the consequences of altering wage levels.
- Recognize the behavioral implications of elasticity in public policy, such as the effectiveness of sin taxes.