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.

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Definitions:

Intelligence Scores

Quantitative measures used to assess an individual's general cognitive abilities or intelligence quotient (IQ).

Correlation

A metric that reveals the degree of co-movement between two or more variables.

Intelligence Test Scores

numerical outcomes derived from assessments designed to measure human intelligence and cognitive abilities.

Household Incomes

The combined gross income of all members of a household who are 15 years old or older, including wages, salaries, pensions, and other sources.