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Homework answers / question archive / Suppose that a state or local government increases the tax on cigarettes
Suppose that a state or local government increases the tax on cigarettes. Comparing the quantity demand after the tax is imposed with the quantity demanded before the tax was imposed describes a _____ experiment.
A. controlled
B. stratified
C. laboratory
D. natural
It is stated that state and local government increases the amount of tax on Cigarettes to discourage its consumption. Also, it is natural that this tax widens the gap between quantity demanded before and after-tax in the economy. Hence, it can be classified as a natural experiment.
