Would you expect a tax on cigarettes to be more

Would you expect a tax on cigarettes to be more effective at
discouraging consumption over the long run or the short run.
(A)Long run because demand becomes more elastic over time.
(B)Short run because demand becomes more elastic over time.
(C)Long run because demand becomes less elastic over time.
(D)Short run because demand becomes less elastic over time.
(20) - Green

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2:
Econ 2001
Brandon Genetin
(10) - White
• Logically, we know that cigarettes are addictive because of
Nicotine.
• Given they are addictive, it will be hard to change your demand
tomorrow if the price increases by $1.00.
• However, given time, you can quit smoking, and then you will be
more willing to decrease your demand.
• Thus, demand is more elastic in the long run, because you are
able to change your preferences and your situation.
• Thus, the answer is (A).
(20) - Green
Home

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2:
Econ 2001
Brandon Genetin
(30) - White
Alison is deciding how to spend the next hour. We ask her the utility she
would get from an hour at each activity. She would get utility of 4 from an
hour of reading, utility of 2 from an hour of playing video games, and utility
of 6 from jogging. Based on this information, economists could predict that
Alison will:
(21) - Green

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EVIEW OF
E
XAM
2:
Econ 2001
Brandon Genetin
(30) - White
Alison is deciding how to spend the next hour. We ask her the utility she
would get from an hour at each activity. She would get utility of 4 from an
hour of reading, utility of 2 from an hour of playing video games, and utility
of 6 from jogging. Based on this information, economists could predict that
Alison will:
(21) - Green
Home

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2:
(16) - White
When a person’s income increases:
(22) - Green
Econ 2001
Brandon Genetin

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E
XAM
2:
Econ 2001
Brandon Genetin
(16) - White
When a person’s income increases:
(A) The individual’s budget constraint rotates out and becomes flatter.
(B) The individual’s budget constraint shifts straight out, maintaining
the same slope.
(C) The individual’s budget constraint rotates in and become steeper.
(D) The individual’s budget constraint shifts straight in, maintaining
the same slope.
(22) - Green
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2:
Econ 2001
Brandon Genetin
(25) - White
If a binding price floor were placed in the
market in the graph shown:
(A) The supply curve would have to shift.
(B) Quantity demanded would exceed
quantity supplied.
(C)Quantity supplied would exceed
quantity demanded.
(D)The demand curve would have to shift.
(23) - Green

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2:
Econ 2001
Brandon Genetin
(25) - White
• At the price floor of $23:
• Quantity demanded is 20.