Question

3. A recent article reports that drunken driving has risen in communities that have imposed smoking bans in their bars and taverns. The gist of the problem is that smokers who also drink are now driving longer distances to get to bars that allow them to smoke while they are drinking. Does the decision to impose a smoking ban on the bars and taverns in the community create an externality? What do you think motivated policy makers to impose this smoking ban?

Answer 1

Externality is the cost that affects a party that did not not choose to incur that cost. Smoking ban on the bars and taverns in the community create an externality as passive smokers get affected much. Smoke which is inhaled by the people in the vicinity of the smokers create as harmful effects to the passive smokers as to the active smokers.

This smoking ban has been imposed to reduce the smokers in the city and the harmful effects caused by the smoke inhaled by the passive smokers who are in close vicinity of the active smokers.