It Has Been Estimated That the Price Elasticity for Cigarettes

question 59

Multiple Choice

It has been estimated that the price elasticity for cigarettes is 0.164. Assuming there are currently no taxes on cigarettes, to reduce cigarette purchases by 5 percent, the government would need to tax cigarettes enough to:

• A) raise the price by 0.82 percent.
• B) lower the price by 0.82 percent.
• C) raise the price by 30.5 percent.
• D) lower the price by 30.5 percent.

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Definitions:

Collective Unconscious

A concept in psychology proposed by Carl Jung, suggesting that humanity shares a set of inherited, universal mental contents or archetypes.

Freud's Unconscious

A theory by Sigmund Freud which posits that part of the human mind is inaccessible to the conscious mind but affects thoughts and behavior.

Aggressiveness

Behavior characterized by anger or hostility, which can be physical or verbal, directed towards others or oneself.

Repressed Hostility

Unconscious anger and resentment that is suppressed and not outwardly expressed, thought to contribute to psychological distress.