A-LevelEconomicsGovernment microeconomic intervention9708/12 · May/June 2019 · Q151 Mark
Too much sugar causes an increase in a consumer's weight. A government has introduced a 'sugar tax' on the consumption of soft drinks that have a high sugar content. How might this policy help to reduce the number of overweight people?
AConsumers switch to cheaper brands of soft drink with a high sugar content.
BConsumers switch to other high-sugar substitute goods, such as alcohol or sweets.
CThe price elasticity of demand for soft drinks is inelastic.
DThe tax revenue is spent on education about the dangers of soft drink consumption.
✓ Correct answer
D: The tax revenue is spent on education about the dangers of soft drink consumption.
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