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PT52 Sec3 #6

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luxembourg220
luxembourg220's picture
PT52 Sec3 #6

Hello, Dave~

About PT52 Sec3 #6 answer choice (b), it is wrong because it does not matter whether consumers 'continue' to buy the products or not? They can keep buying it, for instance, at lower prices? Also, comparison of the price increase ('higher taxes' vs 'some other reason') somehow does not weaken the stimulus? I'm not sure, though.

It seems like you have already answered to the similar question, but I cannot find it in answer central! Please help. Thanks in advance:)

majorgeneraldave
majorgeneraldave's picture

Think of it this way: if only 1% of all smokers would keep buying cigarettes after a price increase due to increased costs of production (or whatever), but 2% will continue buying their smokes if that increase is due to taxes, then (B) is true, and it still does nothing at all to weaken the argument—the tax would cut smoking rates by 98%; it would work like crazy!

luxembourg220
luxembourg220's picture

You are totally right! It has nothing to do with weakening the stimulus. Thank you, Dave:)

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