Using the concept of substitutes and complements, A. explain with the help of a diagram how legalising cannabis may possibly affect the sales of alcohol and cigarettes. B. When the State government evaluates the effect of legalising cannabis on tax revenue, should it look only at the sales of cannabis? Or, should it also consider the changes in the sales of alcohol and cigarettes?

Using the concept of substitutes and complements, A. explain with the help of a diagram how legalising cannabis may possibly affect the sales of alcohol and cigarettes. B. When the State government evaluates the effect of legalising cannabis on tax revenue, should it look only at the sales of cannabis? Or, should it also consider the changes in the sales of alcohol and cigarettes?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 20RQ: Under which circumstances does line tax burden fall entirely on consumers?

See similar textbooks

Similar questions

1. What sort of product is alcohol in economic terms if the government wants to restrict consumption of it? 2. Analyze the social costs of alcohol 3. Analyze the factors that would determine the impact of a price increase on the consumption of alcohol. Is introducing a minimum price a better way of reducing consumption than trying to change peoples’ attitudes?
8. Suppose we want regular cars to be gradually replaced by electric cars. There are several kinds of government interventions that could be used to make this happen, or at least to push the car market to produce and sell more electric cars. Explain how a tax could be used for this purpose, and then explain how a subsidy could be used for this purpose.
Solve it correctly please.
With the help of appropriate diagrams, explain how a tax can be used to reduce the consumption of a harmful product such as cigarettes.
You are asked to estimate the demand curve for Lake Mead recreational area by Las Vegas residents. a. Show on a graph what this demand curve would look like. Make sure to label properly your graph. Explain your graph. b. A new Clark County program improves the quality of Lake Mead beaches. Show on your graph how this affects the demand curve. Explain. Highlight the area representing the benefits of the program to Las Vegas residents. Explain. What is a potential limitation of this approach? Explain. c. d.
QUESTION 46 46. Given that the U.S. government mandates the use of ethanol as a partial substitute for gasoline (10% by volume), and that ethanol manufactured in the U.S. is made from corn, what will happen if the government eliminates the price support for corn? a) Demand for ethanol will increase. b) Demand for ethanol will decrease. c) Supply of ethanol will increase. d) Supply of ethanol will decrease. e) Both (a) and (c)
For each of the following questions identify which of the two types of consumer would likely be charged more for the good in question. Explain your perspective. 1. You may notice that there are no prices posted on the side of ice cream trucks. Who is likely to be charged more for ice cream: Children or Parents? Why? Parents are likely to be charged more for ice cream. 2. If you are flying on an airplane, you very likely paid a different price than most of the other people on your flight. Who is likely to be charged more for a ticket on an airplane: Businessmen or Vacationers? Why? Businessmen are likely to be charged more for a ticket on an airplane. 3. It costs the same to produce each unit of Microsoft Office that is sold, but students and business executives pay different prices. Who is likely to be charged more for Microsoft Office: Students or Business Executives? Why? Business Executives are likely to be charged more for Microsoft Office 4. Who is likely to be charged more for a…
Under which circumstances does line tax burden fall entirely on consumers?
Question You are in the business of producing and selling popcorn, cheese, crackers, and wine. The government plans to impose a tax on one of these products. Based on the elasticities in the table provided, as a profit-minded business person, which good would you (the business owner) most prefer to have taxed? Price elasticity Price elasticity of supply of demand Popcorn 1.2 2.0 Cheese 2.2 1.1 Crackers 1.6 1.3 Wine 1.7 1.8 Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a Cheese b. Crackers Рорсоrn Wine
56. Table 3.10 shows the supply and demand for movie tickets in a city. Graph demand and supply and identify the equilibrium. Then calculate in a table and graph the effect of the following two changes. 1. Three new nightclubs open. They offer decent bands and have no cover charge, but make their money by selling food and drink. As a result, demand for movie tickets falls by six units at every price. 2. The city eliminates a tax that it placed on all local entertainment businesses. The result is that the quantity supplied of movies at any given price increases by 10%. Price per Pound Qd Qs $5.00 26 16 $6.00 24 18 $7.00 22 20 $8.00 21 21 $9.00 22 Table 3.10 20
Which of the following explains why a seller might charge a high price when a new video game console is first released and then lower the price as time goes by? Select one: a. The buyers want to buy the new video game console only if the price is high because a high price signals good quality. b. The seller wants to test the market to see how consumers react to the product. c. The seller has to sell the newly released video game console at the government-mandated price. d. The seller can charge a high price to consumers who want to be the first ones to own a newly released product.
If the government could charge different entry or user fees at different national parks to raise revenue for the maintenance of the parks, it should charge Select one: a. lower prices at parks where demand is relatively inelastic. b. the same prices for all the national parks. c. higher prices at parks where demand is relatively inelastic. d. higher prices at parks where demand is relatively elastic. e. a percentage of the estimated cost of building the park