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Q1. Economics of the Environment (I) (L5) - Tobacco Industry in Australia [16 marks] Consider the market for tobacco cigarettes, as outlined in the following pertinent article and key weblinks contained within: Morphett, Kylie, Coral Gartner, William Clarke (2021) "Making the tobacco industry pay for cigarette litter could stop 4.5 billion butts polluting the Australian environment", The Conversation, December oth, available: https://theconversation.com/making-the-tobacco- industry-pay-for-cigarette-litter-could-stop-4-5-billion-butts-polluting-the-australian-environment-171831 Based on this discussion and relevant microeconomic theory: (i) identify the relevant parties involved and describe two private benefits and two external costs of cigarette butts with filters; (ii) draw an appropriate diagram to illustrate and explain the negative production externality; and (iii) critically evaluate a tax policy to help solve the market failure in this case. To make constructing the diagram simpler, assume that the market is competitive and use hypothetical data (rough guesses) relying on intuition where applicable. [400 to 500 words is the suggested amount for Q1] [6 marks for diagram + 10 marks for quality of analysis = 16 marks] 

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Q1. Economics of the Environment (1) (L5) - Tobacco Industry in Australia [16 marks] Consider the market for tobacco cigarettes, as outlined in the following pertinent article and key weblinks contained within: Morphett, Kylie, Coral Gartner, William Clarke (2021) "Making the tobacco industry pay for cigarette litter could stop 4.5 billion butts polluting the Australian environment", The Conversation, December 6th, available: https://theconversation.com/making-the-tobacco- industry-pay-for-cigarette-litter-could-stop-4-5-billion-butts-polluting-the-australian-environment-171831 Based on this discussion and relevant microeconomic theory: (i) identify the relevant parties involved and describe two private benefits and two external costs of cigarette butts with filters; (ii) draw an appropriate diagram to illustrate and explain the negative production externality; and (iii) critically evaluate a tax policy to help solve the market failure in this case. To make constructing the diagram simpler, assume that the market is competitive and use hypothetical data (rough guesses) relying on intuition where applicable. [400 to 500 words is the suggested amount for Q1] [6 marks for diagram + 10 marks for quality of analysis = 16 marks] Q1. Economics of the Environment (1) (L5) - Tobacco Industry in Australia [16 marks] Consider the market for tobacco cigarettes, as outlined in the following pertinent article and key weblinks contained within: Morphett, Kylie, Coral Gartner, William Clarke (2021) "Making the tobacco industry pay for cigarette litter could stop 4.5 billion butts polluting the Australian environment", The Conversation, December 6th, available: https://theconversation.com/making-the-tobacco- industry-pay-for-cigarette-litter-could-stop-4-5-billion-butts-polluting-the-australian-environment-171831 Based on this discussion and relevant microeconomic theory: (i) identify the relevant parties involved and describe two private benefits and two external costs of cigarette butts with filters; (ii) draw an appropriate diagram to illustrate and explain the negative production externality; and (iii) critically evaluate a tax policy to help solve the market failure in this case. To make constructing the diagram simpler, assume that the market is competitive and use hypothetical data (rough guesses) relying on intuition where applicable. [400 to 500 words is the suggested amount for Q1] [6 marks for diagram + 10 marks for quality of analysis = 16 marks]