Wednesday, October 03, 2007

Unit 2: Demerit goods and government action: Raising the age you can buy cigarettes

On the 1st Oct 2007, it became illegal to sell tobacco products to under 18's. This BBC clip and article both explain why the government has taken this action
< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7020000/newsid_7021300?redirect=7021376.stm&news=1&nbram=1&bbram=1&bbwm=1&nbwm=1&asb=1 >

http://news.bbc.co.uk/1/hi/uk/7021320.stm

a) Why are cigarettes a demerit good?
b) What type of actions does the government take to overcome the market failure associated with cigarette smoking
c) To what extent do you believe this latest initiative will overcome the market failure?

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