cheese are substitutes or complements Calculate the income elasticity of demand and tell whether bagels are normal or inferior Case in Point: Teen Smoking and Elasticity Tobacco kills more people than any other substance or disease Worldwide, the annual death toll from tobacco is well over million people per year In the United States alone, 400,000 people die each year as a result of their use of tobacco More than two-thirds of smokers indicated in 1995 that they would prefer to quit smoking but were unable to so, according to the Centers for Disease Control and Prevention In fact, less than 2.5 per cent of smokers succeed in quitting each year Most smokers begin using tobacco as teenagers Teens tend to underestimate the danger of smoking and to overestimate their likely ability to quit smoking when they choose to so One can, therefore, argue that the decision to smoke may not be a rational one, and it is one that imposes substantial costs on the rest of society Because it raises health-care costs, it raises health insurance rates And the evidence is mounting that secondhand smoke imposes serious health consequences on nonsmokers Because smoking is such a serious problem for our society, and because the decision to smoke is typically made when one is a teenager, health economists tend to focus on measures to prevent young people from smoking One place to begin in limiting teen smoking is price The price elasticity of demand for teenage smokers is greater (in absolute value) than that for the population in general because the cost of tobacco represents a greater Attributed to Libby Rittenberg and Timothy Tregarthen Saylor URL: http://www.saylor.org/books/ Saylor.org 264