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BUS702 Economics for Managers

   

Added on  2020-05-04

7 Pages903 Words35 Views
Running head: ECONOMICS FOR MANAGERSEconomics for ManagersName of the StudentName of the UniversityAuthor note
BUS702 Economics for Managers_1
ECONOMICS FOR MANAGERS1Table of ContentsAnswer 1..........................................................................................................................................2Answer 2..........................................................................................................................................4Answer a......................................................................................................................................4Answer b......................................................................................................................................4Answer c......................................................................................................................................5Answer d......................................................................................................................................5References........................................................................................................................................6
BUS702 Economics for Managers_2
ECONOMICS FOR MANAGERS2Answer 1In view of growing cost of health services, it is recommended for Australian governmentto adapt a combine strategy of tax and subsidy on food and beverages (theconversation.com2017). The imposition of tax increases the effective price paid by the consumer while subsidyreduces the effective price that consumers pay. Many countries have already imposed tax onunhealthy foods and sugary drinks. The extent of the policy impact depends on elasticity ofsupply and demand.Figure 1: imposition of tax on sugar and sweet snacksConsider a tax on sweet and sugar snacks. Elasticity of high, low calorie sweets and sugarsnacks are relatively inelastic with own price elasticity of -0.270 and -0.295. This means thedemand curve for these items are steep. With inelastic demand, buyers share a greater burden of
BUS702 Economics for Managers_3

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