We Would Expect That a Tax on Cigarettes Will Be

question 144

Multiple Choice

We would expect that a tax on cigarettes will be more effective at discouraging consumption over the _______ because demand becomes _______ elastic over time.

• A) long run; more
• B) long run; less
• C) short run; more
• D) short run; less

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Definitions:

Call

In finance, a call refers to an option contract that gives the holder the right, but not the obligation, to buy a stock, bond, commodity, or other instruments at a specified price within a specific time period.

Stock Price

The cost of purchasing a share of a company, as traded on a stock exchange, reflecting the market's view of its collective prospects.

Value

The importance, worth, or usefulness of something, often measured in terms of money or utility.

Underlying Stock

Refers to the stock on which options contracts and other derivatives are based, and whose price movements they follow.