Barron, to his parents' dislike, has been smoking cigarettes. Trying to dissuade his son from smoking, father Donald Trump asked Barron if he would smoke less if the price of cigarettes were to increase. To this question, Barron told his father, "yes." In the meantime, equally distraught mother Melania asked her son if he would smoke less if his allowance was reduced. To this question, Barron answered, "no, that would make me smoke more." That night, Donald (excitedly) told his wife Melania that he was going to raise the real price of cigarettes through a federal cigarette tax because Barron had told him that if the price of cigarettes went up, he would smoke less. However, Donald's excitement soon turned to concern when Melania told her husband of Barron's stated response to a cut in allowance. "Not only is Barron smoking, but now he's lying too!" Is Barron lying to his parents?

The above case study highlights two different scenarios where the consumption of cigarettes will change. One is with the change in the price of the cigarettes (price elasticity) and the second with a change in the income of the consumer Baron (income elasticity).

Price elasticity of cigarettes is less than one which means that with the percentage change in the price of the commodity there will be less percentage change in the quantity demand for cigarettes. Cigarettes are an addictive product. It affects the neuron and brain functioning of the individual consuming it. The person consuming it becomes addicted to consumption and it becomes a necessary commodity for him.

In the above case study when Barron was asked that if increasing the prices of cigarettes will affect his consumption the answer given by him was untrue. Barron will not be able to reduce the extent of cigarette consumption at the same level as a rise in the prices of cigarettes. Hence increasing prices will not be helpful.

On the other side, Baron was asked if a fall in his income will affect his consumption of this Baron replied that a fall in income will increase his consumption. This statement given by Barron is also false.

Income elasticity calculates the degree of change in the consumption of a commodity with a change in the income level of the person consuming the commodity. The income elasticity of cigarettes is less than one which means that with percentage fall in the income the consumption does not fall with same the proportion since cigarettes are considered a drug and to have addictive properties. If the income of Barron is reduced his consumption for it will fall but with much less proportion to fall in the income. The statements given by Barron were untrue and he can be considered a liar as from the above case study.