Refer to the Following Table to Answer the Question A) Cigarettes

question 46

Multiple Choice

Refer to the following table to answer the question. A local government is looking to reduce "undesirable" behavior on the part of its citizens: drinking alcoholic beverages and smoking. Assuming people cannot shop for alcoholic beverages out of town, a 10 percent tax on all alcoholic beverages would have the largest proportionate effect on the sale of: $\begin{array}{|c|c|}\hline \text { Good } & \text { Elasticity } \\\hline \text { Cigarettes } & 3 \\\hline \text { Liquor } & .5 \\\hline \text { Wine } & .4 \\\hline \text { Beer } & .1 \\\hline\end{array}$

• A) cigarettes.
• B) liquor.
• C) beer.
• D) wine.

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