Question

Refer to the News Wire to answer two questions NEWS WIRE EXTERNALITIES Secondhand Smoke Kills More Than 600,000 people a Year: Study Secondhand smoke globally kills more than 600,000 people each year, accounting for 1 percent of all deaths worldwide, according to a new study. Researchers estimate that "passive smoking" causes about 379,000 deaths from heart disease, per year, worldwide, Passive smoking also kills 165.000 people each year due to lower respiratory disease, 36,900 deaths from asthma, and 21.400 deaths from lung cancer. Children account for about 165,000 of the deaths. Forty percent of children and 30 percent of adults regularly breathe in secondhand smoke. Source: World Health Organization How much global output is lost annually as a result of adult deaths from secondhand smoke if the average adult produces a. $15,000 of output per year? billion b. S20.000 of output per year? 8.746 billion

Answer 1

Global output lost annually due to adult deaths can be computed by multiplying output produced by average adults and number of adult deaths. The total number of deaths caused by passive smoking, Number of total deaths = from heart disease+ from lower respiratory+ from asthma + from lung cancer = 379,000 +165,000 + 36,900 +21,400 = 602, 300 The number of adult deaths, Adult deaths = Number of Total deaths - Children deaths = 602, 300 – 165, 000 = 437,300 a. Suppose the output produced by average adult is $15,000 per year. The global output lost annually due to adult deaths is, Global output lost =number of total deaths x output produced by average adults = 437,300 x $15,000 =$6,559,500,000 = $6.5595 billi on Hence, global output lost when $15,000 output produced by average adult is $6.5595 billion. b. Suppose the output produced by average adult is $30,000 per year. The global output lost annually due to adult deaths is, Global output lost = number of total deaths x output produced by average adults = 437,300 x $30,000 =$13,119,000,000 = $13.119 billion Hence, global output lost when $30.000 output produced by average adult is S13.119 billion.