Melbourne city council is trying to quantify the social cost of smoking in order to determine the optimal value of a tax on smoking.What factors should they include when calculating the social cost of smoking?
A)The chewing gum costs of the smokers and the price consumers pay for cigarettes
B)The price consumers pay for cigarettes and the costs to the bystanders affected by the air pollution
C)The costs to the bystanders affected by the air pollution only
D)The price consumers pay for the cigarettes

Question

Quizplus · Accepted Answer

The social cost of smoking includes not only the cost to the individual smoker but also the cost to society, such as the negative effects of air pollution on bystanders. The cost to the individual smoker, such as the price they pay for cigarettes or chewing gum, is not as relevant to the social cost. Therefore, option B is the best choice as it includes both the price consumers pay for cigarettes and the costs to the bystanders affected by the air pollution.

Melbourne City Council Is Trying to Quantify the Social Cost