ATMC BUS502 Principles of Economics for Accountants

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ATMC BUS502 Principles of Economics for Accountants
Assessment Task 2 – Responses to articles
Article 2: DUE via Safe Assign 6pm Saturday 12th May
Full Name:
Student number:
Tutor’s name:
Article Title:
“What is the Soda Tax and which cities have one”by Beverly Birdfrom The Balance from
25th November 2018. Available at:
https://www.thebalance.com/soda-tax-and-which-cities-have-one-4151209
Instructions:
Access the article at the URL given above and read it carefully. Answer the questions and
complete the diagrams in the spaces provided below. Use full sentences. If you use any
references, please list at least the URL of your source. Possible total for this assessment task is
15 marks.

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Question 1
According to the article, ‘the tax should reduce consumer demand for unhealthy food and
beverages’.Use the supply and demand diagram below to illustrate and explain how the
imposition of a tax affect consumers.
As per the information provided in the article, it is evident that soda tax would be levied on
the sellers of these products. Owing to this, there would be a hike in the production cost
which would have an impact on supply. The higher costs would adversely impact supply
leading to shifting of supply curve in upward direction. This is clearly indicated in the above
diagram while the demand curve remains static. The end result is that there is a shift in the
equilibrium position which alter the initial price and quantity. The price of the soda drinks
increases while the consumption decreases which is what the intention of the government
is.