logo

Effectiveness of Fiscal Policies

4 Pages752 Words194 Views
   

Added on  2020-04-29

About This Document

Effectiveness of Fiscal Policies 4 Running Head: Effectiveness of Fiscal Policies The effectiveness of Fiscal Policy Actions of the Government Student Name Affiliation Course/Number Instructor Name Due Date The effectiveness of Fiscal Policy Actions of the Government Question 1 The Effectiveness Sugar tax imposition Price P1 P Demand Q1 Q Quantity of Sweets and Sugary Snacks The graph above represents the changes that would occur if tax was imposed on sweets and sugary snacks. Question 2 Question 2a in his argument laid out the simple idea presented by

Effectiveness of Fiscal Policies

   Added on 2020-04-29

ShareRelated Documents
Running Head: Effectiveness of Fiscal PoliciesThe effectiveness of Fiscal Policy Actions of the GovernmentStudent NameInstitutional AffiliationCourse/NumberInstructor NameDue Date
Effectiveness of Fiscal Policies_1
Effectiveness of Fiscal Policies2The effectiveness of Fiscal Policy Actions of the GovernmentQuestion 1 The Effectiveness Sugar tax impositionPrice P1 PDemand Q1 Q Quantity of Sweets and Sugary SnacksThe graph above represents the changes that would occur if tax was imposed on sweets and sugary snacks. Since the demand is inelastic to both low and high calorie food stuffs, the demand curve is steeply sloped; the close the elasticity to zero, the more vertical the slope becomes; at zero the curve is perfect inelastic and is vertical. The initial price is P and quantity level is Q. Since the demand is inelastic, the tax incidence will be borne by the consumers; the producers will be able to transfer nearly or the whole burden to the consumers. The price level will rise significantly. It however would require a huge tax imposition to bring some desired changes in the market behavior. I would therefore argue for the tax/subsidy imposition. Althoughthe change won’t be significant, at least there will be a reduction in the obesity level which is rising every year in Australia. The subsidy will raise the welfare of the citizens who are health conscious since they will be paying less that what they were paying earlier. The loss of consumers’ surplus for the sweets and sugary snacks consumers will be a gain to the fruits and vegetables consumers.
Effectiveness of Fiscal Policies_2

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
BUS702 : Economics for Managers
|4
|786
|61

BUS702 Economics for Managers - Assignment
|4
|744
|67

BUS702 Economics for Managers
|7
|903
|35

BUS702- Economics for Managers
|4
|790
|29

BUS702 Economics for Managers - Assignment
|7
|858
|87

Economics Assignment on Price Elasticity
|6
|988
|170