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A Consumer Derives Utility for "All Other Goods," G,and Cigarettes,s

Question 35

Multiple Choice

A consumer derives utility for "all other goods," g,and cigarettes,s.The price of "all other goods" equals $9 and the price of cigarettes is $10.Now suppose the government implements a $0.50 per-unit tax on cigarettes to encourage a decrease in smoking.How does the tax affect the marginal rate of transformation,MRT?


A) The MRT will decrease to - A consumer derives utility for all other goods, g,and cigarettes,s.The price of all other goods equals $9 and the price of cigarettes is $10.Now suppose the government implements a $0.50 per-unit tax on cigarettes to encourage a decrease in smoking.How does the tax affect the marginal rate of transformation,MRT? A) The MRT will decrease to - . B) The MRT will increase to - . C) The MRT will increase to - + 0.05. D) The MRT will decrease to - - 0.05. .
B) The MRT will increase to - A consumer derives utility for all other goods, g,and cigarettes,s.The price of all other goods equals $9 and the price of cigarettes is $10.Now suppose the government implements a $0.50 per-unit tax on cigarettes to encourage a decrease in smoking.How does the tax affect the marginal rate of transformation,MRT? A) The MRT will decrease to - . B) The MRT will increase to - . C) The MRT will increase to - + 0.05. D) The MRT will decrease to - - 0.05. .
C) The MRT will increase to - A consumer derives utility for all other goods, g,and cigarettes,s.The price of all other goods equals $9 and the price of cigarettes is $10.Now suppose the government implements a $0.50 per-unit tax on cigarettes to encourage a decrease in smoking.How does the tax affect the marginal rate of transformation,MRT? A) The MRT will decrease to - . B) The MRT will increase to - . C) The MRT will increase to - + 0.05. D) The MRT will decrease to - - 0.05. + 0.05.
D) The MRT will decrease to - A consumer derives utility for all other goods, g,and cigarettes,s.The price of all other goods equals $9 and the price of cigarettes is $10.Now suppose the government implements a $0.50 per-unit tax on cigarettes to encourage a decrease in smoking.How does the tax affect the marginal rate of transformation,MRT? A) The MRT will decrease to - . B) The MRT will increase to - . C) The MRT will increase to - + 0.05. D) The MRT will decrease to - - 0.05. - 0.05.

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