A tax on Cigarettes introduced in Mexico in 2012 increased the price of Cigarettes by about 10%. An evaluation of the first two years of this measure found that Cigarette consumption fell on average by 7.6%, with a larger decrease (11.7%) in low income households. The study also estimated an increase in consumption of alternatives to smoking, particularly Nicotine patches, of 2.1% (AYA, 2017) Explain factors that determine responsiveness to a price increase. Which of these factors might explain the difference in the economy and low income households?
A tax on Cigarettes introduced in Mexico in 2012 increased the price of Cigarettes by about 10%. An evaluation of the first two years of this measure found that Cigarette consumption fell on average by 7.6%, with a larger decrease (11.7%) in low income households. The study also estimated an increase in consumption of alternatives to smoking, particularly Nicotine patches, of 2.1% (AYA, 2017) Explain factors that determine responsiveness to a price increase. Which of these factors might explain the difference in the economy and low income households?
Chapter1: Making Economics Decisions
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![A tax on Cigarettes introduced in Mexico in 2012
increased the price of Cigarettes
by about 10%. An evaluation of the first two years
of this measure found that Cigarette
consumption fell
on average by 7.6%, with a larger decrease
(11.7%) in low income households. The study also
estimated an increase in consumption of
alternatives to smoking, particularly Nicotine
patches, of
2.1% (AYA, 2017)
Explain factors that determine responsiveness to
a price increase. Which of these factors
might explain the difference in the economy and
low income households?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5d5fb0db-b4f1-430e-ba8e-9d655110b504%2Fe3005483-9e57-47f0-9173-3f609ac9e20b%2F0zk7z0t_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A tax on Cigarettes introduced in Mexico in 2012
increased the price of Cigarettes
by about 10%. An evaluation of the first two years
of this measure found that Cigarette
consumption fell
on average by 7.6%, with a larger decrease
(11.7%) in low income households. The study also
estimated an increase in consumption of
alternatives to smoking, particularly Nicotine
patches, of
2.1% (AYA, 2017)
Explain factors that determine responsiveness to
a price increase. Which of these factors
might explain the difference in the economy and
low income households?
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