Unit 1: Smoking and Market Failure

The latest attempt to stop people smoking is a hard hitting advert that shows a tumor growing out of a cigarette.

Click on this link HERE for more information.

Questions to think about:

What are the negative externalities associatied with smoking

What methods does the Government already use to stop smoking - which is the most effective and why?

What would a negative externality diagram WITH tax look like?

How does a tax on cigarettes affect consumer and producer surplus?