Question: a) Explain why cigarette smoking is often described as a good with negative externalities. b) Why might a tax on cigarettes induce the market for

a) Explain why cigarette smoking is often described as a good with negative externalities.

b) Why might a tax on cigarettes induce the market for cigarettes to perform more efficiently?

c) How would you evaluate a proposal to ban cigarette smoking? Would a ban on smoking necessarily be economically efficient?

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