Recent Question/Assignment

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 Bird from 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.
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.

Question 2
The article claims that “resulting revenues are an important part of the equation”. Use the demand and supply diagram below to illustrate and explain the Government revenues and the changes in consumer surplus and producer surplus, and the dead weight loss, due to an imposition of a tax.

Question 3
According to the article residents of Philadelphia and Cook County “are not drinking less soda” following the imposition of the tax on sugary drinks.
A. Explain in your own words what this means in terms of elasticity.
B. Complete the diagrams below to explain and illustrate the effect of the imposition of a tax on sugary drinks on equilibrium price and quantity in two cases: when the elasticity of demand for sugary drinks is
I. relatively inelastic.
II. relatively elastic.