In 1890 tobacco was more commonly chewed than smoked. If one chews tobacco, one must spit frequently. Spitting became very common. It has been noted that tobacco chewers often ended up spitting on their own pants. Spitting was also identified as one way that tuberculosis (TB) was spread (i.e., if the tobacco chewer had TB he could spread it to others by spitting on the ground). Assume tobacco chewers do NOT spit on other people’s pants.
A. the marginal private cost of tobacco chewing
includes the cost of dirty pants
B. the marginal external cost of tobacco chewing
includes the cost of dirty pants
C. the marginal social cost of tobacco chewing
includes the cost of spreading tuberculosis, but not the cost of
dirty pants
D. both a. and c.
The marginal private cost for an individual would include both the cost of tobacco and the cost of dirty pants and there is also a social cost wherein people are at a risk of getting Tuberculosis.
Hence the correct option is
D. Both a and c.
In 1890 tobacco was more commonly chewed than smoked. If one chews tobacco, one must spit...