Order the answer to: Upper Slobbovians smoke 10 million cigarettes per year; so do

Assignment Help business-economics Order the answer to: Upper Slobbovians smoke 10 million cigarettes per year; so do

business-economics

Order the answer to: Upper Slobbovians smoke 10 million cigarettes per year; so do

Question Upper Slobbovians smoke 10 million cigarettes per year; so do Lower Slobbovians. To discourage smoking, each country imposes an excise tax of 50¢ per pack. As a result, the price of cigarettes rises by 35¢ per pack in Upper Slobbovia, but by only 15¢ per pack in Lower Slobbovia. True or False: The Upper Slobbovian excise tax discourages smoking more effectively (that is, it leads to a bigger decrease in smoking) than the Lower Slobbovian excise tax. Answer on the assumption that the supply curves for cigarettes are identical in both countries. Justify your answer.
Subject business-economics
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