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Question
As a government official, Nolan wants fewer people to smoke. He has decided to use taxes to discourage people from smoking. How would he describe his decision to an economist?
a. If I increase taxes on cigarettes, there will be an increase in demand, which means fewer people are smoking.
b. If I decrease taxes on cigarettes, there will be a decrease in demand, which means fewer people are smoking.
c. If I decrease taxes on cigarettes, there will be an increase in quantity demanded, which means fewer people are smoking.
d. If I increase taxes on cigarettes, there will be a decrease in demand, which means fewer people are smoking.
e. Taxes will have no effect on demand for cigarettes.
Answer
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Related questions
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