Monday, November 23, 2009

Unit 1: Drawbacks of using indirect taxes to reduce market failure: Pub beer

An interesting video from the BBC

http://news.bbc.co.uk/1/hi/business/8373230.stm

a) What does this seem to indicate about the price elasticity of demand for pub beer?
b) Discuss whether pub closures would indicate the government has been successful in decreasing the negative externalities associated with alcohol consumption

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