Microeconomics

Explain why a tax increase on cigarettes in one state might not lead t

Explain why a tax increase on cigarettes in one state might not lead to a substantial price increase for all consumers in that state. What will be an ideal response?   ANSWER Smuggling of non-taxed cigarettes and on-line buying where taxes don’t apply by some consumers may prevent a price increase for these consumers.  

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Date: September 9th, 2020

To prevent obesity, the government may establish a tax on high caloric

To prevent obesity, the government may establish a tax on high caloric foods, such as twinkies. A twinkie tax will have the smallest impact on quantity demanded when the demand curve for twinkies is A) perfectly elastic. B) perfectly inelastic. C) more elastic than the supply curve. D) both A and B.   ANSWER B […]

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Date: September 9th, 2020