Numerous studies have shown that breathing second-hand cigarette smoke is harmful to your health. This suggests that a tax on cigarettes will:
A)increase total economic surplus.
B)decrease total economic surplus.
C)have no effect on total economic surplus.
D)lead to a decrease in the price of cigarettes.

Question

Quizplus · Accepted Answer

Second-hand cigarette smoke is a negative externality. This suggests that a tax on cigarettes will increase total economic surplus.

Numerous Studies Have Shown That Breathing Second-Hand Cigarette Smoke Is