07 Feb A new tax on cigarettes would not be v

Suppose we know that the price elasticity of demand for sandals is -1.2. A shoe store normally sells 100 pairs of sandals each month. If it decides to raise the price of its sandals by 10%, how many sandals would it then sell per month?

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Question 21 pts

Suppose we know that the price elasticity of demand for sandals is -1.2. If a shoe store decides to reduce the price of its sandals by 10%, will its revenue increase, decrease, or stay the same?

Group of answer choices

decrease

There is not enough information given to answer the question.

increase

stay the same

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Question 32 pts

Suppose we know that the price elasticity of demand for sandals is -1.2. A shoe store normally sells 100 pairs of sandals each month for a price of $20 per pair. If it decides to reduce the price of its sandals by 10%, by how many dollars will the store’s revenue change?

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Question 41 pts

The estimated price elasticity of demand for cigarettes is -0.4 in high-income countries and -0.8 in lower-income countries. If a country’s government raises taxes on cigarettes, the price to consumers goes up. The extra revenue collected from the higher price goes to the government.

Would imposing a new tax on cigarettes stop more people from smoking in a high or lower-income country?

Group of answer choices

The tax would be very effective at reducing smoking in both countries, but it would be more effective in a higher-income country.

The tax would not reduce smoking in either country.

There is not enough information available to answer the question.

The tax would not be very effective at reducing smoking in either country, but it would be more effective in a lower-income country.

The tax would be very effective at reducing smoking in both countries, but it would be more effective in a lower-income country.

The tax would not be very effective at reducing smoking in either country, but it would be more effective in a higher-income country.

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Question 51 pts

The estimated price elasticity of demand for cigarettes is -0.4 in high-income countries and -0.8 in lower-income countries. If a country’s government raises taxes on cigarettes, the price to consumers goes up. The extra revenue collected from the higher price goes to the government.

Would imposing a new tax on cigarettes be a more effective way of raising revenue in a high or low income country?

Group of answer choices

A new tax on cigarettes would be an effective way to raise revenues in both countries, but the ability to raise revenues would be greater in higher-income countries.

A new tax on cigarettes would be an effective way to raise revenues in both countries, but the ability to raise revenues would be greater in lower-income countries.

There is not enough information available to answer the question.

The tax would not raise revenues in either country.

A new tax on cigarettes would not be very effective way to raise revenues in either country, but the ability to raise revenues would be greater in lower-income countries.

A new tax on cigarettes would not be very effective way to raise revenues in either country, but the ability to raise revenues would be greater in higher-income countries.