Cigarettes Are Known to Cause Negative Externalities

question 23

Multiple Choice

Cigarettes are known to cause negative externalities.Which one of the following will help to reduce the consumption of cigarettes?

• A) A subsidy paid to cigarette producers.
• B) Compensation paid to the smokers who end up with lung cancer.
• C) A special tax allowance for cigarette consumers.
• D) A special tax imposed on the production of cigarettes.
• E) Compensation paid to cigarette producers for the articles written about their product.

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Definitions:

Earnings Activities

Business operations or actions that generate income.

Recording

The act of documenting financial transactions in the accounting records of a company.