Studies Indicate That the Price Elasticity of Demand for Cigarettes

question 250

Multiple Choice

Studies indicate that the price elasticity of demand for cigarettes is about 0.4.A government policy aimed at reducing smoking changed the price of a pack of cigarettes from $2 to $6.According to the midpoint method,the government policy should have reduced smoking by

• A)30%.
• B)40%.
• C)80%.
• D)250%.

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Definitions:

Perceptual Masking Task

A technique in cognitive psychology used to investigate the limitations of sensory processing by presenting one visual stimulus immediately after another, influencing the perception of the first.

Dichotic Listening Task

A task in which a person hears two or more different, specially recorded messages over earphones and is asked to attend to one of them.

Stroop Task

A task invented by J. R. Stroop in which a participant sees a list of words (color terms) printed in an ink color that differs from the word named (e.g., green printed in blue ink). The participant is asked to name the ink colors of the words in the list and demonstrates great difficulty in doing so relative to a condition in which non-color words form the stimuli.