5. Even careful news organizationssometimes get confused about percentage change

Question

5.   Even careful news organizationssometimes get confused about percentage changes, so you shouldalways treat what you read in the paper with a healthy dose ofskepticism. For example, consider this statement in the New YorkTimes article included in this news analysis:

"If every country raised cigarette taxes by 10 percent, the studysaid, 42 million smokers would quit and a minimum of 10 milliontobacco-related deaths would be averted."

Notice the difference between this synopsis and what the underlyingarticle from Tobacco Control actually says:

"Using a model of cohort smokers alive in 1995, it is estimatedthat tax increases that would raise the real price of cigarettes by10% worldwide would cause about 42 million of these smokers to quitand prevent a minimum of 10 million tobacco related deaths."

Suppose that worldwide, about half of the retail price of a pack ofcigarettes is accounted for by taxes. (The numbers vary a lot fromcountry to country, but this is not a bad overall estimate.) Also,assume that each penny of additional tax causes the retail price ofcigarettes to go up by one penny.

If taxes go up by 10%, the price of cigarettes will go up by howmuch? A.   5% B.   15% C.   10% D.   20%

Explanation / Answer

If you have a tax of 10%, omit, b,c,and d because that is morethan 10%. What do you have left?the only answer could be 5%.

Related Questions

Navigate

• Browse (All)
• Browse 5
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.