Question

Question 2 (5 marks)

The links between tobacco smoking, passive smoking and lung cancerare well established.

1. What are the features of tobacco smoke that imposes externalities? (2 marks)

2. Explain whether these are:

1. positive or negative externalities? (1/2 mark)
2. production or consumption externalities (1/2 mark)

3. In a supply and demand diagram show the deadweight loss associated with tobacco smoke under a scenario where there are externalities (2 marks)

please write all the question clearly.

Answer 1

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