Spain imports cigars from Cuba. The Spanish health ministry is worried about the negative effects of tobacco on passive smokers and is considering three different options for reducing tobacco consumption: A quota on cigar imports from Cuba, an import tariff on cigars, and a consumption tax. a) Using graphs analyze the welfare effects of the three policies. (While answering this question assume that the Spanish cigar industry operates under perfect competition.) b) In welfare terms, how would you classify the 3 policies? c) Which cabinet ministry would like to see a different classification in (b)? Why?

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