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    Microeconomics Study Set 10
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    Exam 18: Externalities
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    A Tax on Cigarettes
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A Tax on Cigarettes

Question 2

Question 2

Multiple Choice

A tax on cigarettes:


A) increases total surplus.
B) increases efficiency in the market.
C) will increase both total surplus and efficiency in the market.
D) like any tax, will always reduce surplus and efficiency in markets.

Correct Answer:

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