Which of the following, if true, would most effectively undermine the argument that raising cigarette taxes reduces the number of people who smoke cigarettes?
A. The demand for cigarettes is relatively inelastic.
B. The demand for cigarettes is relatively elastic.
C. The supply for cigarettes is relatively elastic.
D. The supply for cigarettes is relatively inelastic.
Answer: A
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In and Edgeworth Box economy, no one strictly prefers the endowment allocation to the competitive equilibrium allocation.
Answer the following statement true (T) or false (F)
If the wage rate doesn't change but a profit-maximizing competitive firm hires fewer workers, we know that
A) the price of the product increased. B) technical change occurred that increased labor productivity, reducing the firm's demand for labor. C) demand for the product fell or there has been a reduction in labor productivity. D) marginal factor cost increased.
An example of a positive externality is: a. freeway congestion
b. pollution in a resort lake. c. airport noise. d. beautiful trees on property along a parkway.
Which of the following examples are substitutes in production?
a. shoes; polish b. 2 percent milk; cream c. baseballs; footballs d. crude oil; motor oil