In 2018, the UK Government imposed a new tax on sugary drinks, aimed at tackling obesity. Behavioural economists believed that taxation alone was unlikely to be very effective in reducing consumption.

By 2050 obesity is predicted to affect 60% of adult men, 50% of adult women and 25% of all children. It is associated with a range of health problems including type 2 diabetes, cardiovascular disease, and cancer.

1. Explain why, in a free market, sugary drinks may be overconsumed.

15 marks