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Homework answers / question archive / Suppose you are told that electronic cigarettes cause health problems such as depression and problems with arteries
Suppose you are told that electronic cigarettes cause health problems such as depression and problems with arteries. You also are told that electronic cigarettes do not produce second-hand smoke, meaning that e-smoking (called "vaping") by one person does not harm a person standing nearby. How might economists respond?
a) A standard welfare economist would say that e-smoking imposes an externality if health insurance is pooled and premiums are shared.
b) A standard welfare economist would say that e-smoking does not increase social costs unless having health insurance makes people more likely to use electronic cigarettes.
c) A behavioral economist would ask if people who use e-cigarettes become addicted.
d) All of the above.
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