Friday, May 30, 2008

Unit 2: Demerit goods:More legislation to reduce the availability of cigarettes?

This BBC clip outlines potential new plans to reduce cigarette consumption

http://news.bbc.co.uk/1/hi/health/7428914.stm

More details of the plan and a video of the new information campaign are on this BBC article

http://news.bbc.co.uk/1/hi/health/7427141.stm

a) To what extent do cigarettes meet the 2 criteria of a demerit good?
b) To what extent do you believe the proposals will reduce the market failure associated with cigarette consumption?
c) What other actions do government take to reduce cigarette consumption?

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