Posted: February 9th, 2017
Answer the following questions about the effect of taxation on cigarette smoking in a 100 150) word double spaced essay.
(1) Who is likely to be more affected by tax increases on cigarettes: all adults or young adults? Cite specific elasticity of demand estimates from the article to support your answer.
(2) To have the greatest effect on reducing cancer from tobacco use, what other products should the government tax?
(3) What is the long run elasticity of demand for cigarette smoking? What does this mean for the likely impact of taxes on long term cigarette use?
(4) Do you think taxing can be effective in decreasing the use of alcohol? Explain your answer using economic theory.
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