India bans e-cigarettes

//India bans e-cigarettes

India bans e-cigarettes

CNN: India is banning all e-cigarettes over fears about youth vaping

Article published: Sep 18, 2019

IB Economics syllabus: Microeconomics (negative externality of consumption, government intervention)

India has completely banned all e-cigarettes in the hope to cut all the adverse health issues associated with them. While smoking is usually shown by a negative consumption externality diagram, an outright ban would actually mean that there is no (legal) supply of the product, hence the market no longer functions. Remember, that for a market we need both buyers and sellers, but without sellers, there would be no transactions taking place, hence there is no market activity (nothing to show in a diagram).

On the other hand, it is highly probable that e-cigarettes will still be sold illegally on the black market, which is the downside of an outright ban. The government hopes that the punishment given to dealing with e-cigarettes will deter people from entering the black market either as a buyer or a seller.

Source of image: Prakash Singh / AFP / Getty images

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By | 2019-09-28T11:38:07+00:00 September 28th, 2019|Micro|Comments Off on India bans e-cigarettes

About the Author:

My name is Daniel Szekely and I work as an IB Economics tutor, examiner and teacher. Having earned an MA degree in Economics at the University of Aberdeen, I started my career as a financial analyst at Morgan Stanley, one of the largest investment banks of the world. Yet, despite the promising career prospects of the banking industry, I decided to make a larger social impact by becoming a teacher. Currently, I teach IB Economics at SEK Budapest International School and have been an examiner for over 8 years. I started EconDaddy as a simple blog to share great articles with my students and others taking IB Economics around the world to use for their commentaries. Being a practicing IB Economics tutor, I have first hand insight into the most common mistakes of students, so the EconDaddy blog now also provides exam and commentary writing tips.

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