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Economics (AS & A Level) · May / June 2025 · Paper 32 · Question 9

9708Government policies to achieve efficient resource allocation and correct market failure

A country's government banned cigarette smoking in enclosed public spaces, such as offices, shops, bars and restaurants. What is a government failure arising from this ban?

  1. Adecreased consumption of cigarettes by smokers
  2. Bdecreased levels of passive cigarette smoking by non-smokers
  3. Cincreased litter from used cigarettes outside offices and shops
  4. Dincreased sales of cigarette substitutes like nicotine patches and gum

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Correct answer: C. increased litter from used cigarettes outside offices and shops

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