A tax on cigarettes is inefficient since it is non neutral. Using indifference curves explain whether you agree or not. 1. Draw the graph with indifference curves. 2. Do you agree or not. 3. Explain changes in quantity. 4. Explain who does it affect. 5. Pareto optimal point on the graph and the formula for the pareto optimal point. 6. Influence on consumer behaviour.
A tax on cigarettes is inefficient since it is non neutral. Using indifference curves explain whether you agree or not. 1. Draw the graph with indifference curves. 2. Do you agree or not. 3. Explain changes in quantity. 4. Explain who does it affect. 5. Pareto optimal point on the graph and the formula for the pareto optimal point. 6. Influence on consumer behaviour.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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