If an Increase in the Excise Tax Imposed on Cigarettes

question 133

Multiple Choice

If an increase in the excise tax imposed on cigarettes pushes the price per pack up by 20 percent, and the quantity sold declines by 8 percent as a result, the price elasticity of demand for cigarettes is equal to

• A) −0.2.
• B) −0.4.
• C) −0.8.
• D) −5.

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Definitions:

Caldera-forming Eruption

A volcanic eruption significant enough to collapse the summit area and form a large, basin-like depression called a caldera.

Minoan

Relating to the Bronze Age civilization centered on Crete (circa 2600–1400 BC), known for its advanced culture, art, and architecture, including the palace at Knossos.

Santorini

A volcanic island in the Aegean Sea, known for its dramatic caldera, white-washed buildings, and as a significant archaeological site.

Mantle Plume

A narrow, ascending column of hot, solid material from the deep mantle that can create hotspots and volcanic activity at the Earth's surface.