Asked by Boston Bragg on May 18, 2024
Verified
Which of the following, if true, would most effectively back the argument that raising cigarette taxes reduces the number of people who smoke cigarettes?
A) The demand for cigarettes is relatively inelastic.
B) The demand for cigarettes is relatively elastic.
C) The supply for cigarettes is relatively inelastic.
D) The supply for cigarettes is relatively elastic.
Cigarette Taxes
A tax levied on cigarettes to increase their price and decrease their consumption for health policy reasons.
Demand for Cigarettes
refers to the total quantity of cigarettes that consumers are willing and able to purchase at a given price level over a specific period of time.
Elastic
A characteristic of a good or service that indicates a high sensitivity of quantity demanded or supplied to changes in its price.
- Understand the influence of elasticity on human behavior within public policy frameworks, particularly in relation to sin taxes.
Verified Answer
CF
Chris FarrellMay 22, 2024
Final Answer :
B
Explanation :
If the demand for cigarettes is relatively elastic, it means that consumers are sensitive to price changes. Therefore, an increase in cigarette taxes, which raises the price, would likely lead to a significant decrease in the quantity of cigarettes demanded, supporting the argument that raising cigarette taxes reduces the number of people who smoke cigarettes.
Learning Objectives
- Understand the influence of elasticity on human behavior within public policy frameworks, particularly in relation to sin taxes.