The Constant Elasticity of Demand for Cigarettes Has Been Estimated

question 81

Multiple Choice

The constant elasticity of demand for cigarettes has been estimated to be 0.5.To reduce smoking by 25%, approximately how much tax needs to be added to a $1 pack?

• A)$.50.
• B)$.75.
• C)$.25.
• D)$.13.
• E)$4.

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Definitions:

Birth Control

Techniques or instruments implemented to avoid conception for the purpose of regulating family size.

Natural Increase

The growth in population size as a result of more births than deaths, not accounting for migration.

Rate of Change

The speed at which a variable changes over a specific period of time.

Teenage Pregnancy Rate

The rate at which females aged 13-19 become pregnant, often used as a social and public health indicator.