Suppose That Smoking Creates a Negative Externality

question 184

Multiple Choice

Suppose that smoking creates a negative externality. If the government imposes a per-cigarette tax equal to the per-cigarette externality, then

• A)the after-tax equilibrium quantity of cigarettes smoked will be less than the socially optimal quantity of cigarettes smoked.
• B)the after-tax equilibrium quantity of cigarettes smoked will be greater than the socially optimal quantity of cigarettes smoked.
• C)the after-tax equilibrium quantity of cigarettes smoked will equal the socially optimal quantity of cigarettes smoked.
• D)There is not enough information to answer the question.

---

Definitions:

Urbanization

The increasing concentration of populations in urban areas, often associated with the growth of cities.

Large-Scale Violence

A term describing extensive and serious acts of violence that impact large populations or geographic areas, often associated with conflicts or wars.

Developing Countries

Nations that are less industrialized and have lower per capita income levels compared to developed countries.

Gentrification

The process by which wealthier individuals move into, renovate, and rejuvenate previously less affluent areas, often displacing the original inhabitants.