What must be true of the elasticity of the demand

Assignment Help Finance Basics

Reference no: EM131500111

Question: In 2002, New York City increased the tax rate on cigarettes from 8 cents a pack to $1.50 a pack. A month after the increase, a spokesman for the mayor noted that "fewer cigarettes are being sold, and the city is making more money [Cooper. 2002, p. BM Assume for simplicity that the supply of cigarettes to New York City is perfectly elastic

a. Assuming that the spokesman facts am comet, what must be true of the elasticity of the demand for cigarettes in New York City?

b. Recall that the spokesman comment was made just one month after the tax increase was enacted. As more time passes, what do you expect to happen to the elasticity of the demand curve, and how will this affect tax revenues for New York City?

Reference no: EM131500111

Questions Cloud

Analyze the process that hackers use to methodically break : Throughout this course, the assignments will have you review and analyze the process that hackers use to methodically break into an information system.

Is the tax progressive or regressive with respect to income : Suppose that the income tax in a certain nation is computed as a flat rate of 5 percent, but no tax is levied above $50,000 in taxable income.

Design and implement a usable internet application : CE00880-5 Web Applications (WA) Assignment. Design and implement a usable Internet application for use on multiple browsers, including connections to a well-designed database using server and client side scripting

Create a domain model class diagram for rmo csms subsystem : Create a domain model class diagram for the RMO CSMS marketing subsystem. Note: The graphically depicted solution is not included in the required page length.

What must be true of the elasticity of the demand : In 2002, New York City increased the tax rate on cigarettes from 8 cents a pack to $1.50 a pack. A month after the increase, a spokesman for the mayor noted.

Sketch a model that is consistent with the given argument : A New York Thaws editorialist recently advocated a cut in the payroll tax. Among other advantages, he argued that it would stimulate hiring.

Explain to impose a large excess burden : A tax of 24 percent on the use of cellular phones. (This is the appmximate sum of federal and state tax rates in California, New York, and Florida.)

Create a riskless hedged investment : Using the binomial option pricing model, create a riskless hedged investment

Does psychological dysfunction exist in the therapy model : Psychopathology is the manifestation of mental/behavioral disorders. Does psychological dysfunction exist in the existential therapy model?

User Account

All Pages