Smoking+all+the+Profits


 * Title of Article: Smoking all the Profits**
 * Source:** []
 * Date:** Feb. 13, 2011
 * Explanation:** The state-owned China National Tobacco Corporation (CNTC) owns a monopoly on cigarettes in the Chinese economy. The $500 billion yuan in taxes that they pay annually to the government is a clear indication that they are making a large amount of abnormal profits. Although there have been recent efforts to curb the sell and consumption of tobacco, the fact that the government is responsible for the oversight of the industry but also owns the industry (and thus wishes to maximize it's profit) has led to a conflict of interest with little action being taken. Recently, a bureau under the Chinese government has found out that the cost of all the tobacco related illnesses was about 25% more than the income that the industry is providing to Beijing. Still, there is still much time before serious effort will be taken to address the situation at hand.
 * Vocabulary:**


 * Profit: Difference between total revenue and total costs (including opportunity cost from an economist's perspective".
 * Monopoly: A market in which only one firm sells a product or service.
 * Tax: Money paid to the government that is a percentage of the total revenue that a company earns.
 * Short-term: A period of time where there is a fixed factor of production.
 * Long-term: When there are no fixed values and everything is variable.

I agree with the idea that health costs in the long-term will far outweigh the short-term profits brought in by the tobacco industry but also believe that there are other intangible costs. These may include loss of productivity in workplaces, damage to the environment from tobacco farming along with increased costs of health insurance for non-smokers. China should immediately curb back the amount of tobacco it produces and take measures to discourage the practice so as to save money and lives. In the long-term, as shown by the graph, average cost is obviously going to be much higher than average revenue as health costs escalate. The rate of smoking is on the rise right now and like a slippery slope, will be harder to stop in the future.
 * Graphs:**
 * Conclusion and Evaluation:**