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Cigarettes Are Known to Cause Negative Externalities

Question 23

Multiple Choice

Cigarettes are known to cause negative externalities.Which one of the following will help to reduce the consumption of cigarettes?


A) A subsidy paid to cigarette producers.
B) Compensation paid to the smokers who end up with lung cancer.
C) A special tax allowance for cigarette consumers.
D) A special tax imposed on the production of cigarettes.
E) Compensation paid to cigarette producers for the articles written about their product.

Correct Answer:

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