Midterm..Exam Review

Midterm..Exam Review - 0.4 if a pack of cigarettes...

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30 mc (2 each) 10 t/f (2 each) 3 short question (20) Chapter 1 – 6 Chapter 4 about 30% Chapter 1,2 less than 20% Chapter 3 close to 20% **Question from end of the chapter. Example: Pg. 135, #5 An MP wants to raise tax revenue and make workers better off. A staff member proposes raising the payroll tax pained by firms and using part of the extra revenue to reduce the payroll tax paid by workers. Would this accomplish the MP’s goal? Pg. 112, #8 Consider public policy aimed at smoking. a. Studies indicate that the price elasticity of demand for cigarettes is about
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Unformatted text preview: 0.4. if a pack of cigarettes currently costs $8 and the government want to reduce smoking by 20 percent, by how much should it increase the price? b. If the government permanently increases the price of cigarettes, will the policy have a greater effect on smoking one year from now or five years from now? c. Studies also find that teenagers have higher price elasticity than do adults. Why might this be true? MUST KNOW QUESTION BEHIND BOOK!...
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