Discussion Questions
The Canadian Government was able to achieve a reduction in cigarette smoking such that when the price was raised above $4 a pack adult smoking declined by 38% and teenage smoking declined by over 61%. What economic principle was at play here? Why the difference?
The US announced a stated goal of reducing teenage smoking by 30% in five years and 50% in seven years. What would you propose the tax rate should be over that period of time and why?
How would you consider "what you learned" about elasticity of demand from this case study about the taxing of cigarettes?