Microeconomics Discussion 3

W2 Discussion

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Topic:

• Recently there has been discussion in the news about taxing junk food (soft drinks, for example) in an effort to reduce the incidence of obesity in the U.S. Do you think the demand for junk food is elastic or inelastic with respect to price?
• Based on your knowledge of the price elasticity of demand, do you think the deadweight loss of a soda/junk-food tax would be relatively large or relatively small? Why? Do you think taxing junk food would be a good idea? Based on your analysis, would it really help reduce the number of obese people in the United States? Explain.

Directions:

1. Post your initial reply (250 word minimum) to the topic above by Wednesday evening at 11:59pm.
2. Read through the other entries and reply directly to at least two classmates (150 word minimum) by Sunday evening at 11:59pm. 

Please make a substantive contribution to the discussion; short replies such as "I agree" will not earn full points. When you reply, make sure to use professional grammar and punctuation.