Which of the following, if true, would most effectively undermine the argument that raising cigarette taxes reduces the number of people who smoke cigarettes?
A. The demand for cigarettes is relatively elastic.
B. The demand for cigarettes is relatively inelastic.
C. The supply for cigarettes is relatively elastic.
D. The supply for cigarettes is relatively inelastic.
Answer: B
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Which of the following is considered a negative supply shock?
A) an unexpected decrease in the refining capacity for oil B) an improvement in technology C) increasing immigration in the economy causes the labor supply to rise D) an increase in unemployment
Which of the following statements is NOT true?
A) Unemployment in the US economy represents an excess demand for labor. B) A surplus may be reduced by shifting the demand curve rightward. C) A surplus may be reduced by shifting both the supply and demand curves. D) A shortage may be reduced by shifting the supply rightward.