Return to the market for cigarettes from the previous question. ...

[Beheh]

Return to the market for cigarettes from the previous question. What per-unit tax could the government levy to eliminate the deadweight loss from the behavioral bias?
 a. 0
  b. 1
  c. 50
  d. 100

Question 2

Return to the case of Jan, the hyperbolic discounter from the previous question. Suppose she can sign a contract that requires her to give up money equivalent to a loss of X utils if she does not undertake the action. Assume she does not behave consistent with her plans without this contract. How high would the contractual value of X have to be to prevent her inconsistency?
 a. C  B/2.
  b. B.
  c. C.
  d. B + C.

[kiamars2010]

Answer to Question 1

c

Answer to Question 2

a

[Beheh]

Excellent

[TheDev123]

TYSM