Saturday, November 10, 2007

Unit 2: Alcohol consumption; Market failure and taxation

The drinks industry is opposing measures designed to reduce binge drinking such as higher alcohol taxes stating they do not believe they will be successful according to this BBC clip and article:
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a) How does the alcohol market fail?
b) What are the two proposed measures?
c) Using a diagram in each case, explain how each of the two proposals would reduce the market failure?
d) Discuss the extent to which either or both of the proposals is likely to be successful in reducing the market failure

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