Legitimate Targets

Economics concepts are very useful in explaining real world issues. In order to enhance your learning, and to make your studies more interesting and useful, it is strongly recommended that you follow the latest economic debates through the media. This task will assess your ability to apply economic concepts to real-world situations. It comprises of a media review in which you are required to review and critically analyse at least one media article (can be from a newspaper, magazine or any printed media) by using economic concepts and theories.


Part 1

Choose ONE article and prepare a summary of about 300 words. The selected article should be current, that is, from January 2018 ONWARDSExplain how this issue/article is related to microeconomics. You are required to attach the full article at the back of your write up.

Part 2

Study the article and apply any THREE microeconomic terms/concepts (any topics from Topic 1 to Topic 13). Discuss the relevance of the news item to the THREE concepts you have chosen. You are expected to integrate as best possible the concepts and theories presented in lectures with the material in the article. You are to provide between 3 to 6 proper references and/or citations. This section should not exceed 900 words.

Part 3

Illustrate and describe the issue from the article using at least ONE appropriate diagram. This section should be approximately 300 words.

Article to refer

Cola drinkers everywhere may shed a tear this weekend. After years of squabbling between industry and public health campaigners, a tax on sugary drinks has finally come into force. The price of a can of coke, which contains about seven teaspoons of sugar, has gone up by 8p. Other sweet drinks, such as Lucozade and Ribena, have slashed their sugar content to avoid the tax, and consumers are complaining that old favourites now taste vile. They will get used to it. They will get healthier too.

The rationale for the sugar tax, first devised by George Osborne when chancellor in 2016, is simple. Britain is too fat. Some 27 per cent of the population is obese and more than 70 per cent of those born in the 1980s and early 1990s will be overweight by middle age. This results in a raft of avoidable health problems. Obesity, after all, is the second biggest cause of cancer after smoking. But it is not only the obese who suffer. Simon Stevens, chief executive of NHS England, has said that he believes obesity costs the NHS about £16 billion a year.

Critics say the tax is regressive, hitting the poorest hardest. They are right. Lower-income groups do consume more sugary drinks and junk food. There are regressive taxes and regressive taxes, however. This is not a poll tax which the poorest have to pay. The point is to change companies’ behaviour to limit the amount of sugar in their products, and change consumers’ behaviour to discourage them from buying the worst ones. Anyone who does not want to pay the sugar tax does not have to.

Opponents bash the sugar tax as a victory for big government over the rights and freedoms of consumers and businesses. The case for free markets is one worth making, but it depends on the private sector acknowledging its social responsibilities. At the beginning of Theresa May’s premiership, the industry successfully lobbied the government to plump for voluntary sugar reduction rather than coercive measures. The industry was on track to miss those targets. That bolstered the case for a tax.

It works, too. We know this because Britain is not the first country to apply it. Mexico introduced a similar tax at the beginning of 2014 and by the end of the year consumption of sugary drinks had fallen by 12 per cent. It is too early to tell whether Mexicans are getting healthier as a result, but the public health evidence suggests they will.

This tax should only be the start though. Mr Osborne has rightly suggested that it should be extended to certain coffees. Some drinks sold by Starbucks contain three times as much sugar as a can of coke. There is no sense in exempting them when they do every bit as much damage as their fizzy competitors.

Even fruit juices and smoothies, despite their patina of wholesomeness, could be considered legitimate targets. These contain huge amounts of sugar and there are much healthier ways to get a serving of fruit and vegetables.

The government could also think about other ways to nudge the public into healthier habits. A month ago The Times reported that Mrs May had shed her opposition to heavier regulation of junk food advertising, a policy associated with David Cameron’s government that Mrs May ditched after she arrived in Downing Street. A good start would be to ban junk food adverts on television before the 9pm watershed and during programmes popular with children. Curbs on “buy one get one free” offers and the like, which are estimated to account for 8.7 per cent of sugar taken home from the shops, are worth considering too. The long-term health of the nation and its youth is at stake, and there is no sense in sugaring the pill. The government can save lives by taking action, and it is right to do so.

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