Question

Consider the following public policies in the market for cigarette smoking: an aggressive (successful) anti-smoking media campaign and a Department of Agriculture program limiting the land to grow tobacco. Both policies are implemented at the same. Are the policies effective in reducing cigarette smoking? Why? What happened to the price of cigarettes after the policies went into effect? Why?

Answer 1

If both the campaigns are implemented simultaneously and successfully then it will reduce cigarette smoking. Because as the question mentions there is a successful anti smoking campaign, so the campaign will definitely motivate people to quit smoking. There will be a lot of people who will get influenced by the campaign and there will also be people who will stop smoking due to its high price. This will happen because of the limited land area permitted for tobacco production. The price of cigarettes will definitely go high because of the limitation of land because as there will be lesser amount of land available for production the total output will decline and also the production cost of tobacco will also increase and this will make the price of cigarettes to go up.