If the Demand for Cigarettes Is Inelastic, a Per-Unit Tax

question 56

Multiple Choice

If the demand for cigarettes is inelastic, a per-unit tax on cigarettes will cause the quantity demanded to:

• A) fall proportionally more than the increase in price caused by the tax.
• B) fall proportionally less than the increase in price caused by the tax.
• C) rise proportionally more than the increase in price caused by the tax.
• D) rise proportionally less than the increase in price caused by the tax.

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Definitions:

Loose Culture

A societal or organizational culture that is characterized by a relaxed approach to rules and regulations, encouraging individuality and freedom.

Beliefs and Attitudes

The personal convictions and views held by an individual or group that influence behavior and perceptions.

Tight Cultures

Societies or organizations where there are strong norms and a low tolerance for deviant behavior.

High Power Distance

A cultural dimension that refers to the degree to which less powerful members of institutions and organizations expect and accept that power is distributed unequally.