Would You Expect a Tax on Cigarettes to Be More

question 78

Multiple Choice

Would you expect a tax on cigarettes to be more effective at discouraging consumption over the long run or the short run?

• A) Long run because demand becomes more elastic over time
• B) Long run because demand becomes less elastic over time
• C) Short run because demand becomes more elastic over time
• D) Short run because demand becomes less elastic over time

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Definitions:

Consolidated Omnibus Budget Reconciliation Act

A U.S. federal law that provides individuals and their families the option to continue healthcare coverage for a limited time after losing health benefits.

Policy Premiums

The amounts of money that individuals or organizations pay for insurance policies over a set period.

Administrative Fee

Charges apart from the basic services or goods provided, often included to cover the cost of administrative expenses.

Taft-Hartley Act

A U.S. federal law that restricts the activities and power of labor unions.