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Recently, the government's economic advisers have favored the establishment of a food tax to increase its taxable income. This can occur since the demand for

  1. Recently, the government's economic advisers have favored the establishment of a food tax to increase its taxable income. This can occur since the demand for food consumption is inelastic. How does this approach show the tradeoff between efficiency and equity that exists in a market economy? How can this type of tax be favored or not?
  2. We can consider the case where wine producers in Chile ask the government to tax imported wines from France with a tax. They consider that this tax would increase both the State's tax revenue and employment in the Chilean wine industry. What kind of economic argument is this in relation to international trade? Do you agree or not with the argument presented by wine producers in Chile? If the state government adopts this position, does it consider it to be good economic policy or not? Briefly explain your answers using the concepts of international trade.

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