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Assignment:
Watch the following PBS Newshour story on Philadelphia’s implementation of a tax on sugary drinks:
Link: https://youtu.be/WLW6-oqniLE
Write at least two paragraphs answering the following questions:
- Why might revenues generated from the tax fall short of expectations?
- Do you think that Philadelphia should or shouldn’t have adopted the tax to fund pre-K education? Support your brief argument with economic concepts covered in the course.
- Suppose a government wants to use tax policy to persuade people to not consume certain products or services. Suppose, the government has limited resources and can only enforce (or collect) a limited number of taxes. Should that government target goods or services that have an elastic or inelastic price elasticity of demand (ED)? Why?
- Suppose the goal of a government is to raise as much money as possible to fund governmental services. Should the government target goods and services that have an inelastic or elastic ED? Why?
In addition, it is required to reply to at least two other students’ posts by offering respectful suggestions, comments, or critiques related to the subject matter and their post.
Actual revenues fall short versus the expectation because consumer’s behavior changes as the prices changes. Since tax will increase the price of the sugary drinks, consumers will tend to limit their consumption, which made the actual revenue to be lesser amount.
The revenues generated from the tax might fall short of expectations because society is not ready to those kind of changes. The majority of people like sugar-soda drinks and if prices going to go up some of them