1.Refer to Figure 4 in Chapter 4. Analyze the case based on these two graphs and the theory, complements and supplements.

2.What is your conclusion? Raising taxes on tobacco has any impact on smoking?

3.Post your views to the discussion board and refer to at least two different concepts from this week's Chapters. Your illustration of concepts MUST include an explanation why you think they are are relevant to the week's topic using specific information from the articles, videos and other research that you have done.

Figure 4 Shifts in the Demand Curve versus Movements along the Demand Curve (a)

FIGURE 4 By contrast, if a tax raises the price of cigarettes, the demand curve does not shift. Instead, we observe a movement to Shifts in the Demand a different point on the demand curve. In panel (b), when the price rises from $4 to Curve versus Movements $8, the quantity demanded falls from 20 to 12 cigarettes per day, as reflected by the along the Demand Curve movement from point A to point C. (b) A Movement along the Demand Curve Price of A tax that raises the price Cigarettes, per Pack of cigarettes results in a C movement along the . ..... demand curve. . .. . D1 . . . . . . 12 - 20 Number of Cigarettes Smoked per DayFIGURE 4 If warnings on cigarette packages convince smokers to smoke less. the demand curve for cigarettes shifts to the left. In panel (a), the demand curve shifts from D1 to 02. At Shifts in the Demand a price of $4 per pack, the quantity demanded falls from 20 to 10 cigarettes per day, Curve versus Movements as reflected by the shift from point A to point B. along the Demand Curve (a) A Shift in the Demand Curve Price of Cigarettes, per Pack A policy to discourage smoking shifts the demand curve to the left. Number of Cigarettes Smoked per Day