Why are taxes, one traditional remedy for negative externalities, less than ideal for smoking cessation in the United States? a. Nicotine is addictive/demand is inelastic, and smokers are mostly poor, so in effect cigarette taxes reduce the quality of life of people we're trying to help without substantially reducing smoking b. Demand is inelastic, and smokers are mostly rich, so they don't reduce smoking as a result of taxes c. Demand is elastic, and smokers are mostly old, so taxes reduce smoking but cause increased anxiety among the elderly d. Demand is elastic, and smokers are mostly young, so they quit smoking but are then more likely to experiment with illegal drugs
Why are taxes, one traditional remedy for negative externalities, less than ideal for smoking cessation in the United States? a. Nicotine is addictive/demand is inelastic, and smokers are mostly poor, so in effect cigarette taxes reduce the quality of life of people we're trying to help without substantially reducing smoking b. Demand is inelastic, and smokers are mostly rich, so they don't reduce smoking as a result of taxes c. Demand is elastic, and smokers are mostly old, so taxes reduce smoking but cause increased anxiety among the elderly d. Demand is elastic, and smokers are mostly young, so they quit smoking but are then more likely to experiment with illegal drugs
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter12: Environmental Protection And Negative Externalities
Section: Chapter Questions
Problem 40P: Show the market for cigarettes in equilibrium, assuming that there are no laws banning smoking in...
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