If cigarettes and marijuana had been found to be substitutes, what would a tax placed on cigarettes do? decrease the demand for marijuana increase the demand for marijuana decrease the quantity demanded of marijuana increase the quantity demanded of marijuana

If cigarettes and marijuana had been found to be substitutes, what would a tax placed on cigarettes do? decrease the demand for marijuana increase the demand for marijuana decrease the quantity demanded of marijuana increase the quantity demanded of marijuana

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Laffer Curve Analysis

In terms of economics, the Laffer curve was popular among those economists who were or who belonged to the supply side of the economic peripheral. This concept was popularized by the famous supply-side economist known as Arthur Laffer. This curve illustrated the relationship between the tax rates and government revenue. It is already known that the tax which the public or individuals residing in an economy bear is the revenue or income of the government with the help of which the government does all the necessary works in the society, which is beneficial for the economy.

Question

If cigarettes and marijuana had been found to be substitutes, what would a tax placed on cigarettes do?
decrease the demand for marijuana
increase the demand for marijuana
decrease the quantity demanded of marijuana
increase the quantity demanded of marijuana

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