The External Costs of Cigarettes Are Related to the Health

question 45

Multiple Choice

The external costs of cigarettes are related to the health problem smoking produces for both smokers and nonsmokers.One estimate places these costs at 29 cents per pack.Presently, sales and excise taxes on cigarettes average about 37 cents per pack.These estimates suggest that (i) cigarette consumption is below the optimal or efficient quantity; (ii) cigarette taxes should be reduced.

• A)i and ii
• B)i but not ii
• C)ii but not i
• D)neither i nor ii

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Definitions:

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