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Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364

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BuyFindarrow_forward

Principles of Economics 2e

2nd Edition
Steven A. Greenlaw; David Shapiro
ISBN: 9781947172364
Textbook Problem

Say that the government is considering a ban on smoking in restaurants in Tobaccoville. There are 1 million people living there, and each would benefit by Chapter 18, Problem 27P, Say that the government is considering a ban on smoking in restaurants in Tobaccoville. There are 1 from this smoking ban. However, there are two large tobacco companies in Tobaccoville and the ban would cost them $5 million each. What are the proposed policy's total costs and benefits? Do you think it will pass?

To determine

The total cost and benefit from banning the smoking in T is to be determined.

Explanation

In computing the benefits from ban of smoking in the restaurants, the amount of benefit given is $200 which will be enjoyed by 1 million people living in the T

So, the total benefits to the people living there is:

  Total benefits=$200×1 million=$200 millions

In computing the total cost of ban of smoking in the restaurants, the cost given is $5

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