10. Consider public policy aimed at smoking. 11. a. Studies indicate that the price elasticity of demand for cigarettes is about 0.4. If a pack of cigarettes currently costs $5 and the government wants to reduce smoking by 20 percent, by how much should it increase the price? . If the government permanently increases the price of cigarettes, will the policy have a larger effect on smoking one year from now or ve years from now? . Studies also nd that teenagers have a higher price elasticity of demand than adults. Why might this be true? You are the curator of a museum. The museum is runnlng short of funds, so you would like to increase revenue. Should you increase or decrease the price of admission? Explain. ES 1 . _.__. 12. Explain why the following might be true: A drought around the world raises the total revenue that farmers receive from the sale of grain, but a drought only in Kansas reduces the total revenue that Kansas farmers receive