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Subject - Economics:

Microeconomics

MCQ - 15-4025

Question:

Suppose the price elasticity of demand for cigarettes is less than one. When an excise tax is imposed on cigarette production, it changes the price, quantity, and consumer spending in which of the following ways?

  1. PRICE: Decrease, QUANTITY: Increase, SPENDING: Increase
  2. PRICE: Decrease, QUANTITY: Decrease, SPENDING:Decrease
  3. PRICE: Increase, QUANTITY: Decrease, SPENDING: Decrease,
  4. PRICE: Decrease, QUANTITY: Decrease, SPENDING:Decrease
  5. PRICE: Increase, QUANTITY: Increase, SPENDING: Increase

Correct Answer: D

Explanation:

Excise taxes shift a supply curve leftward, increase price, and decrease quantity. If E d < 1, cigarette consumers spend more on cigarettes.

Record Performance

269 MCQ for effective preparation of the test of Microeconomics of Economics section.

Read the MCQ statement: Suppose the price elasticity of demand for cigarettes is less than one. When an excise tax is imposed on cigarette production, it changes the price, q .... the following ways?, keenly and apply the method you have learn through the video lessons for Microeconomics to give the answer. Record your answer and check its correct answer and video explanation for MCQ No. 15-4025.

How to Answer

Solve the question for MCQ No. and decide which option (A through D/E) is the best choice to answer the MCQ, then click/tap the blue button to view the correct answer and it explanation.

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