If lower-income households spend a greater share of their income on cigarettes than do higher-income households, then a tax that raises the price of cigarettes will
A) cause lower-income households to incur a greater loss of consumer surplus than that incurred by higher-income households.
B) cause higher-income households to incur a greater loss of consumer surplus than that incurred by lower-income households.
C) raise consumer surplus among higher-income households.
D) cause consumer surplus to decline among smokers, but the relative impact cannot be determined from the given information.
D
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Knowledge about the price elasticity of demand is especially useful to managers because it allows them to predict how a change in price would affect a firm's total profit
Indicate whether the statement is true or false
If people believe that prices are going to be higher in the future then they are today, they will
a. wait until the future to purchase the things they wand b. decrease their demand now c. increase their demand now d. increase their supply now e. save more today so they have the income to buy more in the future