Smoking increases the risk of lung infections not only for active smokers but also for other...

Smoking increases the risk of lung infections not only for active smokers but also for other people inhaling the smoke passively. Which of the following will help in reducing smoking?

A. A corrective tax

B. A life insurance

C. A health insurance

D. A health tax

Expert Solution

The correct answer is part A i.e A corrective tax . Corrective tax is a tax imposed on manufacturing or production of a good to increase its cost of production and price of good . Smoking creates negative externalities . So as price of good increases the demand for cigarette will fall which in turn decrease smoking .

Rahul Sunny answered 2 years ago

Unfortunately, many tobacco smokers diagnosed with cancer do not stop smoking, which increases their risk of...

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