Franklin buys a bottle of his favorite brand of Scotch every Friday on his way home from work. A new tax means the price of the bottle has increased. Franklin could buy fewer bottles of Scotch, but he might also choose to:

a. calculate how many utils he gets per glass from a bottle.
b. create a demand curve that demonstrates ceteris paribus.
c. switch to drinking bourbon.
d. cut back on a different expense so he can pay the higher price of the Scotch.

d. cut back on a different expense so he can pay the higher price of the Scotch.

If a tax on alcohol leads to a higher price at the liquor store, the higher price of alcohol causes the budget constraint to pivot left, and consumption of alcoholic beverages is likely to decrease. However, people may also react to the higher price of alcoholic beverages by cutting back on other purchases.