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economic - Coursework Example
Author : kelvin49
Finance & Accounting
Pages 5 (1255 words)
British American Tobacco British American Tobacco was ‘born’ international over 100 years ago and is one of the world’s most international tobacco group. They have 50 cigarette factories in over 41 countries and their subsidiaries produce around 724 billion cigarettes…
Primarily they concentrate on the production of cigarettes however they also produce cigarillos, roll your own or pipe tobacco and smokeless snus. The production of tobacco results in a lot of unintended outcomes of production also known as externalities. A lot of these resulting externalities are negative. According to N. Gregory Mankiw- A, a negative externality is an action of a product on consumers due to which negative side effects on a third party result. British American Tobacco produces several negative externalities. Some of these are significant damage to the environment, reduction in economic productivity, pollution, a contribution to world hunger and a exorbitant health care costs that society and not the tobacco industry pays as a result of their products (Babere K. C.) Tobacco leafs that are plucked at tobacco farms, that British American Tobacco owns throughout the world, basically constitutes to the first step in the production process. A huge amount of manual labor is required for this process. Tobacco farms in Milawi, where British American Tobacco dominates the market alone has over 78,000 laborers most of which are children. This constitutes to a negative externality for BAT in terms of child labor. As an effect of handling this tobacco leafs these children, according to The Learning Economist, suffer from symptoms of green tobacco sickness or nicotine poisoning. ...