Understanding International Business Led to Potential Solutions

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Market Costs:

A government tax may not be the right policy for minimizing adult’s cigarette consumption, but it’s still beneficial for economic growth in the long run. As mentioned earlier, nicotine is addictive and it doesn’t take much to feel the effects of the nicotine. A new study found that children can get ‘hooked’ within a few days of smoking (Wang, Henley, & Donovan, 2004). By preventing kids from ever trying cigarettes it is almost guaranteed they won’t get addicted. If government taxes on tobacco products are high enough where kids wouldn’t be able to get ahold of them. According to the World Health Organization, if tobacco consumption doesn’t decrease, there will be about eight million people that suffer from deadly diseases in the next two decades (2011). Overall, a high enough tax on tobacco products could potentially decrease the number of people that suffer from deadly diseases by targeting the younger generation.

Conclusion

Without government intervention, the consumption of tobacco products will cause a halt in economic growth, directly relating the health risks associated with tobacco. If countries impose a tax, it will decrease the intake of cigarettes on kids. The target market of tobacco companies used to be adults, but that is becoming an unsuccessful marketing strategy. Government policies should target young smokers’ because it is the most beneficial in the prevention of premature deaths and avoiding economic growth to decrease. Overall, a high enough tax rate that directly decreases the quantity demand for tobacco and indirectly allows kids to have to wait longer to have enough money to purchase tobacco products.

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References

Chaloupka, F. J., & Straif, K., Leon, M. E. (2011). Effectiveness of tax and price policies in tobacco control. Tobacco Control, 20, 235. Retrieved from http://search.proquest.com/docview/1781923541/abstract/F79CC47658C149B2PQ/2?accountid=14729

Chaloupka, F. J., & Tauras, J. A. (2011) The power of tax and price. Journal Control, 20, 6. Retrieved from http://search.proquest.com/docview/1781944407/abstract/9F06E2F4DC274DA9PQ/10?accountid=14729

Murphy, S. D. (2003). Adoption of Framework Convention on Tobacco Control. The American Journal of International Law, 97, 689-691. Retrieved from http://search.proquest.com/docview/201105749/abstract/B7485666516F4DD0PQ/4?accountid=14729.

World Health Organization. (2010). Technical Manual on Tobacco Tax Administration. The American Journal of International Law, 14, 21. Retrieved from http://apps.who.int/iris/bitstream/10665/44316/1/9789241563994_eng.pdf

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