Consider public policy aimed at smoking. Studies indicate that the price elasticity of demand for cigarettes is about 0.5. If a pack of cigarettes currently costs $5 and the government wants to reduce smoking by 30%, it should increase the price by . If the government permanently increases the price of cigarettes, the effect on smoking 1 year from now will be than the effect 5 years from now. Studies also find that teenagers have a higher price elasticity of demand than do adults. Which of the following statements are consistent with this result? Check all that apply. It is legal for adults to consume alcohol, so many choose to spend their money on that good rather than cigarettes. Adults are more likely to be addicted to cigarettes. Teenagers do not have as much income as adults, so they are more price sensitive.
Consider public policy aimed at smoking. Studies indicate that the price elasticity of demand for cigarettes is about 0.5. If a pack of cigarettes currently costs $5 and the government wants to reduce smoking by 30%, it should increase the price by . If the government permanently increases the price of cigarettes, the effect on smoking 1 year from now will be than the effect 5 years from now. Studies also find that teenagers have a higher price elasticity of demand than do adults. Which of the following statements are consistent with this result? Check all that apply. It is legal for adults to consume alcohol, so many choose to spend their money on that good rather than cigarettes. Adults are more likely to be addicted to cigarettes. Teenagers do not have as much income as adults, so they are more price sensitive.
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter5: Elastic And Its Application
Section: Chapter Questions
Problem 10PA
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Consider public policy aimed at smoking. Studies indicate that the price elasticity of demand for cigarettes is about 0.5.
If a pack of cigarettes currently costs $5 and the government wants to reduce smoking by 30%, it should increase the price by
.
If the government permanently increases the price of cigarettes, the effect on smoking 1 year from now will be than the effect 5 years from now.
Studies also find that teenagers have a higher price elasticity of demand than do adults.
Which of the following statements are consistent with this result? Check all that apply.
It is legal for adults to consume alcohol, so many choose to spend their money on that good rather than cigarettes.
Adults are more likely to be addicted to cigarettes.
Teenagers do not have as much income as adults, so they are more price sensitive.
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