Week 2 Discussion

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School

National University College *

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ECO203

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Economics

Date

Jan 9, 2024

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docx

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Uploaded by DeanKangaroo14805

Topic One: Arguments in favor of food taxes designed to encourage healthy eating: 1. Implementing food taxes on unhealthy products can serve as an effective public health intervention. By increasing the prices of sugary drinks, processed snacks, and other unhealthy foods, it can discourage their consumption and encourage people to choose healthier alternatives. This can lead to reduced rates of obesity, diabetes, and other diet-related diseases, ultimately improving public health outcomes. 2. Food taxes can create economic incentives for both consumers and food manufacturers to prioritize healthier options. Higher prices on unhealthy foods can make healthier alternatives relatively more affordable, prompting individuals to opt for these choices. Simultaneously, food manufacturers may reformulate their products to avoid the tax or introduce healthier options to appeal to price-sensitive consumers, thereby driving innovation and improving the availability of healthier food options. Arguments against food taxes designed to encourage healthy eating: 1. Regressive Effect: Food taxes tend to have a regressive impact on lower-income individuals and families. Since lower-income households often allocate a higher proportion of their income to food expenditures, taxing unhealthy foods can disproportionately burden those who may already struggle with food affordability. This can create an inequitable situation where healthier food choices become unattainable for vulnerable populations. 2. Individual Freedom of Choice: Critics argue that food taxes infringe upon personal autonomy and freedom of choice. They believe that individuals should have the right to make their own decisions about what they eat, without government interference or manipulation through taxation. They contend that education, awareness campaigns, and voluntary initiatives are more appropriate approaches to encourage healthier eating habits, respecting individual rights and freedoms. Topic Two: Determining whether a restaurant offering an "all you can eat" ribs special will go bankrupt solely based on the price of $17.99 and unlimited servings is a complex matter that depends on various factors. While it's possible for such promotions to be financially challenging for some restaurants, it's not guaranteed that they will go bankrupt. Here are a few considerations: 1. The restaurant's ability to sustain the promotion depends on the cost of the ingredients, particularly ribs. If the wholesale price of ribs is relatively low, the restaurant may still be able to make a profit even if customers consume several servings. 2. The price of $17.99 might have been carefully chosen to cover the average cost of the ingredients and other expenses, while still leaving room for profit. Restaurants often analyze their historical data and customer behavior to determine the optimal price point.

3. The restaurant's ability to efficiently manage its operations is crucial. This includes controlling portion sizes, minimizing waste, and optimizing cooking processes. By implementing effective cost-control measures, the restaurant can mitigate the risk of losses. 4. While it's true that some customers may take advantage of the promotion and eat more than the restaurant expects, it's important to consider that not all customers will consume excessive amounts. Many people have a natural limit to how much they can eat, and factors such as time constraints and social dining norms may also influence their consumption. 5. "All you can eat" promotions can attract customers who might not have otherwise visited the restaurant. This presents an opportunity for the restaurant to generate additional revenue by offering other items such as beverages, appetizers, or desserts, which may have higher profit margins. Ultimately, the success or failure of an "all you can eat" promotion depends on the specific circumstances of the restaurant, including its pricing strategy, cost control measures, customer base, and overall operational efficiency. By carefully managing these factors, a restaurant can mitigate the risks and potentially make the promotion financially viable. Topic Three:

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