consider public policy aimed at smoking. Studies indicate that the price elasticity of demand for cigarettes is about 0.4. If a pack of cigarettes currently cost $5 and the government wants to reduce smoking by 20%, it should increase the price by what %? If the government permanently increases the price of cigarettes, the effect on smoking 1 year from now will be blank than the effect 3 months from now. Studies also find that teenagers have a higher price

consider public policy aimed at smoking. Studies indicate that the price elasticity of demand for cigarettes is about 0.4. If a pack of cigarettes currently cost $5 and the government wants to reduce smoking by 20%, it should increase the price by what %? If the government permanently increases the price of cigarettes, the effect on smoking 1 year from now will be blank than the effect 3 months from now. Studies also find that teenagers have a higher price

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter5: Price Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 3SQP

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Consider public policy aimed at smoking. Studies indicate that the price elasticity of demand for cigarettes is about 0.2. If a pack of cigarettes currently costs $5 and the government wants to reduce smoking by 10%, it should increase the price by . If the government permanently increases the price of cigarettes, the effect on smoking 1 year from now will be than the effect 3 months from now. Studies also find that teenagers have a higher price elasticity of demand than do adults. Which of the following statements are consistent with this result? Check all that apply. Teenagers do not have as much income as adults, so they are more price sensitive. It is legal for adults to consume alcohol, so many choose to spend their money on that good rather than cigarettes. Adults are more likely to be addicted to cigarettes.
Consider public policy aimed at smoking. Studies indicate that the price elasticity of demand for cigarettes is about 0.5. If a pack of cigarettes currently costs $5 and the government wants to reduce smoking by 30%, it should increase the price by . If the government permanently increases the price of cigarettes, the effect on smoking 1 year from now will be than the effect 5 years from now. Studies also find that teenagers have a higher price elasticity of demand than do adults. Which of the following statements are consistent with this result? Check all that apply. It is legal for adults to consume alcohol, so many choose to spend their money on that good rather than cigarettes. Adults are more likely to be addicted to cigarettes. Teenagers do not have as much income as adults, so they are more price sensitive.
Consider the public policy initiatives aimed at curbing smoking in Australia. a) Studies indicate that the price elasticity of demand for cigarettes is about -0.20. If a packet of cigarettes currently costs $25 and the Australian Government wants to reduce smoking by 15%, by how much should it increase the price? b) If the Australian Government permanently increases the price of cigarettes, will the policy have a larger effect on smoking 1 year from now or 5 years from now? c) Studies also find that teenagers have a higher price elasticity than do adults. Why might this be the case?
In a hypothetical situation, Government of Pakistan wants to put a curb on cigarette smoking through economic policy: Studies indicate that the price elasticity of demand for cigarettes is about 0.5. If a pack of cigarettes currently costs Rs.200 and the government wants to reduce smoking by 22 percent, by how much should it increase the price? If the government permanently increases the price of cigarettes, will the policy have a larger effect on smoking one year from now or five years from now? Studies also find that teenagers have a higher price elasticity of demand than adults. Why might this be true?
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Suppose that a consumer's annual demand for office visits is described by the equation Q = 8 -0.1p. If office visits cost $30, and the consumer has no health insurance (i.e., the consumer pays full price), how many office visits will she make? What is the price elasticity of demand for office visits at this point? Suppose a health insurance plan is instituted that pays for one-third of each office visit. How would this affect the quantity and the demand elasticity at the new equilibrium?
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P & A Ch 05 Q10 Consider public policy aimed at smoking. Studies indicate that the price elasticity of demand for cigarettes is about 0.2. If a pack of cigarettes currently costs $5 and the government wants to reduce smoking by 10%, it should increase the price by ? %. If the government permanently increases the price of cigarettes, the effect on smoking 1 year from now will be ( larger / smaller ) than the effect 3 months from now. Studies also find that teenagers have a higher price elasticity of demand than do adults. Which of the following statements are consistent with this result? Check all that apply. Adults are more likely to be addicted to cigarettes. Teenagers do not have as much income as adults, so they are more price sensitive. It is legal for adults to consume alcohol, so many choose to spend their money on that good rather than cigarettes.
Exercise : Following an increase in it's price, from 10$ to 12$, the demand for a good falls from 10500 to8100 units.What elasticity of demand would you estimate from these data? Calculate its value, first by using the general formula (for discrete changes), then by assuming a constantconstant elasticity of demand (log formula).Calculate the demand for p=9 (note q9 the quantity for p=9), using the general formula then in log of the elasticity calculated in Now, Knowing the value of the direct price elasticity of demand calculated previously, assuming constant costs andcosts and rivals not responding to your price cut, would you have recommended the price cut from 10 to 9?price cut from 10 to 9 ?
IS THIS ANSWER CORRECT The price elasticity of demand for bread is computed as the percentage change in quantity being demanded with respect to the percentage change in price. Hence, option A is correct. When there is a new product that is a close substitute for bread, the price elasticity of demand for bread would be higher. Hence, option B is correct. When the bread is considered to be a necessity good, the price elasticity of demand for bread would be higher. Hence, option C is correct. Hence, the correct option is D.