Aerated drinks like coke cause obesity, the government can help in restricting its consumption by:
(a) imposing heavy tax on it
(b) prohibiting its sale in the school canteen
(c) increasing the price
(d) counselling the students through the school
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Explanation:
Arguments in favour of a sugar tax:
External costs of sugary drinks – externalities are a cause of market failure
Information failures – people often under-estimate the long term costs to their own healthcare of eating high sugar foods and drinks
Sugar tax raises revenue – this might be ring-fenced for other projects such as increased funding for school and community sports facilities
Tax encourages producers to re-formulate drinks - i.e. make them healthier by reducing the sugar content. There is substantial evidence that this has happened with high sugar drinks.
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