The Federal Government Is Considering Passing an Excise Tax That

question 48

Essay

The Federal government is considering passing an excise tax that would increase the price of a pack of cigarettes by $1.00.What would be the likely effect of this change on the demand and supply of cigarettes? What is likely to happen to cigarette prices and the quantity consumed if the tax bill is enacted?

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Definitions:

Revenues

The income generated from normal business operations, often from the sale of goods and services to customers.

Nonprofits

Organizations that operate for the promotion of a certain cause or the well-being of a community without the primary goal of financial profit.

Lobby

Lobby refers to the act of attempting to influence the decisions made by officials in the government, most often legislators or members of regulatory agencies.

Worth

The value or importance of something, often determined by its qualities or by the amount of money that it can be sold for.