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2: Behavioral biases, taxes and welfare Suppose that the health costs of consuming a bag of potato chips are $4 per bag. However, consumers believe
2: Behavioral biases, taxes and welfare Suppose that the health costs of consuming a bag of potato chips are $4 per bag. However, consumers believe that the costs are only $1 per bag. Assume that all consumers are identical in this and other regards, and that there are no externalities or behavioral biases unrelated to health costs from consuming potato chips
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