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Report on Economic Principle

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Added on  2020-05-28

Report on Economic Principle

   Added on 2020-05-28

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Running Head: ECONOMIC PRINCIPLEEconomic PrincipleName of the StudentName of the UniversityAuthor note
Report on Economic Principle_1
ECONOMIC PRINCIPLE1Table of ContentsAnswer 1: Definition and Concept..................................................................................................2Answer i.......................................................................................................................................2Tax incidence...............................................................................................................................2Answer 2: Market Analysis.............................................................................................................3Answer i.......................................................................................................................................3Answer ii......................................................................................................................................4Answer iii.....................................................................................................................................5Answer 3: Policy effectiveness and alternative strategies...............................................................6Answer i.......................................................................................................................................6Answer ii......................................................................................................................................6References........................................................................................................................................8
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ECONOMIC PRINCIPLE2Answer 1: Definition and Concept Answer i Tax incidence When a tax is imposed, it has an impact on the distribution of social and social welfare.Tax incidence analyses impact of an imposed tax on economic welfare (Moulin 2014). Thegroup or individual who bears the tax burden directly or indirectly realizes the incidence oftaxation. Answer iiThe impact of taxation is a part of the microeconomic lesson on demand, supply andelasticity. The lesson contains how the burden of taxes are divided between buyers and sellersbased on the respective elasticity. A tax on sugary drinks raises its price. Regardless of whetherthe tax is imposed on buyers or sellers, it discourages both groups. Sugar is not good for health.Too much intake of sugar leads to several diseases and raises health expenditure of government.To reduce such costs government often consider taxing sugary drinks (McKenzie and Lee 2016).The tax brings revenue for the government along with improved health condition.
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