Suppose a ban is imposed on consumption of tobacco examine is its likely impact on (i )GDP (ii) welfare

Dear Student

Imposition of ban on consumption of tobacco will have the following effects on :
(1) It will bring down the GDP of the country because a very large proportion of the GDP comes from tobacco and related products, hence a ban on consumption would be bad in respect of the GDP numbers 
(2)But such a ban would have a very good impact on the society and will lead to availability of more and more robust human beings who could now contribute to the economy and the rate of deteriorating health of humans due to the consumption of tobacco will also come down.Hence leading to a very good and large impact on the welfare of the society.


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GDP will come down because the income from the tobacco industries is been added to the national income whereas welfare do the price and their health conditions will increase because of the ban in tobacco
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Tejasri but in.a long run GDP will increse owing to increase in output because with better health will contribute more to production am i right
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Yes, in the long run, it will increase as you said but since we are making a short run analysis GDP will come down.
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