The government of a small town has decided to ban smoking in all restaurants,stores,and government offices.This is an example of the principle that:
A)one person's spending is another person's income.
B)when markets fail to achieve efficiency,government intervention can improve society's welfare.
C)there are gains from trade.
D)"How Much" is a decision at the margin.

Question

Quizplus · Accepted Answer

This policy decision is an example of government intervention in response to markets failing to achieve efficiency. The negative health effects of secondhand smoke have been well-documented, and private businesses may not fully consider these externalities when making decisions about smoking policies. The government's ban on smoking in public spaces can help to improve overall social welfare by reducing these negative externalities.

The Government of a Small Town Has Decided to Ban