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Question 2 (5 marks) The links between tobacco smoking, passive smoking and lung cancerare well established....

Question 2

The links between tobacco smoking, passive smoking and lung cancerare well established.

  1. What are the features of tobacco smoke that imposes externalities?
  1. Explain whether these are:
  1. positive or negative externalities? (1/2 mark)
  2. production or consumption externalities (1/2 mark)
  1. In a supply and demand diagram show the deadweight loss associated with tobacco smoke under a scenario where there are externalities
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