Recall the application about taxing cigarettes to offset present bias.Accordingly to the study,how would the cigarette tax effect low-income households?
A)It will be beneficial as low-income households will respond to changes in the higher price of cigarettes.
B)Low-income households would experience a relatively large increase in lifespan.
C)Low-income households will not benefit from the cigarette tax.
D)A and B are correct.

Question

Quizplus · Accepted Answer

The study suggests that low-income households will respond to changes in the higher price of cigarettes, which implies that they will be more likely to quit smoking or reduce their consumption. Additionally, the study also shows that a decrease in smoking will result in a relatively large increase in lifespan for low-income households. Therefore, both A and B are correct.

Recall the Application About Taxing Cigarettes to Offset Present Bias