Question 2 {Chapter 3 and chapter 11; Subsequent class discussions) The South African government decided to institute a "sugar tax" on beverages consumed in South Africa, to limit the incidence of obesity in South Africa. [a] Explain [and illustrate) how sugar consumption could be viewed as a negative consumption extemality. {4] [b] Explain how this tax should be designed to have the best impact to curb consumption of sugary beverages by choosing between the following options: {i} Should it be designed as a unit tasted vaforem tax? (Explain your answer from a tax equity perspective}. [2} {ii} Should the tax be imposed at the production level or retail level? (Again, justify your decision from a tax equity perspective]. [2} {iii} Briefly discuss some of the potentially unintended consequences such a tax may have on tax equity. E1 [1 ]