Which of the following is considered an economic event?

• A. A consumer purchasing a new smartphone
• B. Rainfall increasing in a rural area
• C. A government imposing a tax on cigarettes
• D. A student reading a novel for leisure

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the definition of an economic event. An economic event is any activity or occurrence that involves the allocation of scarce resources and has an impact on economic agents, such as consumers, producers, or the government.
2. Step 2: Analyze each option to determine if it involves economic decision-making or resource allocation. For example, purchasing a new smartphone involves spending money, which is a scarce resource, so it qualifies as an economic event.
3. Step 3: Consider the option of rainfall increasing in a rural area. While it may affect agricultural productivity, rainfall itself is a natural event and not a direct economic transaction or decision.
4. Step 4: Evaluate the government imposing a tax on cigarettes. This is an economic event because it involves government intervention affecting prices, consumption, and resource allocation.
5. Step 5: Assess the student reading a novel for leisure. This is a non-economic activity because it does not involve a transaction or allocation of scarce resources in an economic sense.