In the Case in Point on Externalities, Irrationality, and Smoking

question 3

Multiple Choice

In the Case in Point on Externalities, Irrationality, and Smoking, economists Gruber and Mullainathan determined that people with a propensity to smoke:

• A) did not act in a manner consistent with bounded willpower or time inconsistency.
• B) had constant utility as excise taxes increased because of perfectly inelastic demand.
• C) would have higher utility as a result of higher excise taxes.
• D) would gain more utility as a result of lower excise taxes.

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Definitions:

Comparative Balance Sheets

Financial statements that present the financial position of an entity at different points in time, side by side, to facilitate comparison.