Principles Of Economics V8.0
Principles Of Economics V8.0
18th Edition
ISBN: 9781453384503
Author: Taylor, John B.; Weerapana, Akila
Publisher: BOSTON ACADEMIC (DBA FLAT WORLD)
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Chapter D, Problem 26CTQ

Exercise D26

If there is a recessionary gap of $ 1 00 billion, should the gamut increase spending by $ 1 00 billion to close the gap? Why? Why not?

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P & A Ch 05 Q10 Consider public policy aimed at smoking. Studies indicate that the price elasticity of demand for cigarettes is about 0.2. If a pack of cigarettes currently costs $5 and the government wants to reduce smoking by 10%, 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 ( larger / smaller )  than the effect 3 months 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.   Adults are more likely to be addicted to cigarettes.   Teenagers do not have as much income as adults, so they are more price sensitive.   It is legal for adults to consume alcohol, so many choose to spend their money on that good rather than cigarettes.
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