Would you expect a tax on cigarettes to be more effective at discouraging

# Would you expect a tax on cigarettes to be more

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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
46 II. R EVIEW OF E XAM 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
47 II. R 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
48 II. R 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
49 II. R EVIEW OF E XAM 2:(16) - WhiteWhen a person’s income increases:(22) - Green Econ 2001 Brandon Genetin
50 II. R EVIEW OF 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 Home
51 II. R EVIEW OF E XAM 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
52 II. R EVIEW OF E XAM 2: Econ 2001 Brandon Genetin (25) - White At the price floor of \$23: Quantity demanded is 20.