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1)Consider public policy aimed at smoking

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1)Consider public policy aimed at smoking. Studies indicate that the price elasticity of demand for cigarettes is about 0.5. If a pack of cigarettes currently costs $5 and the government wants to reduce smoking by 30%, it should increase the price by than the effect 3 months If the government permanently increases the price of cigarettes, the effect on smoking 1 year from now will be from now. Studies also find that teenagers have a higher price elasticity of demand than do adults. Which of the following statements are consistent with this result? Check all that apply. Teenagers do not have as much income as adults, so they are more price sensitive Adults are more likely to be addicted to cigarettes It is legal for adults to consume alcohol, so many choose to spend their money on that good rather than cigarettes.

2)With the aid of a diagram(s), explain how the production possibility curves can be useful in determining levels of efficiency, inefficiency, economic growth and technological improvement

3)In 2017, Hurricane Irma had a significant, negative impact on the orange harvest in Florida. The U.S. Department of Agriculture predicted that the quantity of oranges produced would be 21% lower than the previous year. If the price elasticity of demand for oranges is -1.3, what impact would Hurricane Irma have on the price of oranges if all oranges are sold? Note: You need to calculate actual percentage change in prices using elasticity formula. b) The EpiPen is a life saving device used by people with severe allergies. The U.S. manufacturer of the EpiPen raised its price by nearly 25% per year for nearly a decade. For each price increase of 25%, would quantity demanded change by more or less than 25%? Europe has eight different companies selling devices similar to the EpiPen. If these devices were available in the U.S. market, what would happen to the price elasticity of demand for the EpiPen?

4) Write your answer in the space provided or on a separate sheet of paper. 8) Conigan Box Company produces cardboard boxes. The demand for the boxes is P = 100 - Q. The cost of producing the boxes is FC = 200 plus a MC = 10. a. Calculate Conigan's profit maximizing quantity. Is the firm earning a profit? b. At the profit maximizing quantity, calculate the CS, PS and DWL.