Sunday, February 22, 2015

Derik Graham, Chapter 3, Question 6

The section of this chapter that I found most interesting is the section where Wheelan talked about activities that cause both positive and negative externalities. Wheelan's example was smokers. In his situation smoking caused negative externalities because it will eventually kill the smoker, and because second-hand smoke can be detrimental to those around a smoker. Smoking also caused positive externalities because it kills the smoker faster than a nonsmoker which means that they cannot collect on Social Security which they have been paying into their entire working life and nonsmokers are able to get a return on more than what they paid for. This certainly does pose a benefit to those who choose not to smoke, but my question is for those smokers whos deaths are prolonged or sicknesses treated by medical care is the social cost of taking care of them outweighed?

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