Question
An alcopop is a sweet pre-mixed alcoholic drink. In 2008, the government introduced an 'alcopops tax'. Consider the following policies, each of which aimed at
An alcopop is a sweet pre-mixed alcoholic drink. In 2008, the government introduced an 'alcopops tax'.
Consider the following policies, each of which aimed at reducing the amount of alcopops consumed by people in Australia. Illustrate the effect of each of these proposed policies in a supply-and-demand diagram of the alcopop market. In the diagram, include the welfare impacts of the change (i.e., the changes in consumer and producer surplus).
a)a tax on alcopop buyers(4 marks)
b)a tax on alcopop sellers(4 marks)
c)a price floor on alcopops. (4 marks)
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