Jay is a smoker living in city A. The price for a pack of cigarettes is $6 in city A. The benefit of smoking a pack of cigarettes for Jay is worth $14. Assume that each pack of cigarettes smoked does $6 worth of health damage to the smoker (Jay) in the form of increased cancer risk and $5 worth of health damage to the smoker's neighbors via secondhand smoke. What is the private cost incurred whenever Jay buys a pack of cigarettes (consider all the costs to Jay, including purchase cost and cost of health damage) ? (Please provide one number as the answer, without dollar sign, space, or any other symbol) Is it privately efficient for him to buy a pack of cigarettes at this price? (please input Yes or No, without any other word, symbol or space) What is the public benefit when Jay buys a pack of cigarettes (consider benefits to everyone in the society, in this case, the benefit is to Jay only) ? (Please provide one number as the answer, without dollar sign, space, or any other symbol) What is the public cost incurred when Jay buys a pack of cigarettes (consider all the costs to everyone in the society, including Jay and the others)? (PIlease provide one number as the answer, without dollar sign, space, or any other symbol) Is it socially efficient for Jay to buy a pack of cigarettes at this price? (please input Yes or No, without any other word or symbol)
Jay is a smoker living in city A. The price for a pack of cigarettes is $6 in city A. The benefit of smoking a pack of cigarettes for Jay is worth $14. Assume that each pack of cigarettes smoked does $6 worth of health damage to the smoker (Jay) in the form of increased cancer risk and $5 worth of health damage to the smoker's neighbors via secondhand smoke. What is the private cost incurred whenever Jay buys a pack of cigarettes (consider all the costs to Jay, including purchase cost and cost of health damage) ? (Please provide one number as the answer, without dollar sign, space, or any other symbol) Is it privately efficient for him to buy a pack of cigarettes at this price? (please input Yes or No, without any other word, symbol or space) What is the public benefit when Jay buys a pack of cigarettes (consider benefits to everyone in the society, in this case, the benefit is to Jay only) ? (Please provide one number as the answer, without dollar sign, space, or any other symbol) What is the public cost incurred when Jay buys a pack of cigarettes (consider all the costs to everyone in the society, including Jay and the others)? (PIlease provide one number as the answer, without dollar sign, space, or any other symbol) Is it socially efficient for Jay to buy a pack of cigarettes at this price? (please input Yes or No, without any other word or symbol)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Jay is a smoker living in city A. The price for a pack of cigarettes is $6 in city A. The
benefit of smoking a pack of cigarettes for Jay is worth $14. Assume that each pack
of cigarettes smoked does $6 worth of health damage to the smoker (Jay) in the form
of increased cancer risk and $5 worth of health damage to the smoker's neighbors
via secondhand smoke.
What is the private cost incurred whenever Jay buys a pack of cigarettes (consider
all the costs to Jay, including purchase cost and cost of health damage) ? (Please
provide one number as the answer, without dollar sign, space, or any other symbol)
Is it privately efficient for him to buy a pack of cigarettes at this price? (please input
Yes or No, without any other word, symbol or space)
What is the public benefit when Jay buys a pack of cigarettes (consider benefits to
everyone in the society, in this case, the benefit is to Jay only) ? (Please provide one
number as the answer, without dollar sign, space, or any other symbol)
What is the public cost incurred when Jay buys a pack of cigarettes (consider all the
costs to everyone in the society, including Jay and the others)? (Please provide one
number as the answer, without dollar sign, space, or any other symbol)
Is it socially efficient for Jay to buy a pack of cigarettes at this price? (please input Yes
or No, without any other word or symbol)
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