Economics (AS & A Level) · Oct / Nov 2025 · Paper 33 · Question 12

To reduce the damage done by cigarette smoking, the government of a country increases the indirect tax on cigarettes and makes it illegal to smoke in public. Which combination of circumstances is most likely to result in government failure in its attempt to reduce the damage done by cigarette smoking?

1. Aprice elasticity of demand for cigarettes > 1; government spending on law enforcement high
2. Bprice elasticity of demand for cigarettes > 1; government spending on law enforcement low
3. Cprice elasticity of demand for cigarettes < 1; government spending on law enforcement high
4. Dprice elasticity of demand for cigarettes < 1; government spending on law enforcement low

As printed in the paper