Soda Tax

Fizzy drinks are considered a key source of excess calories in the American diet, where fast food chains sell cups that hold nearly two litres of soda, fuelling an obesity epidemic.

The New York governor is pushing for a tax on these drinks but will this reduce consumption? This is a great article for a lesson on elasticity of demand, taxes and negative externalities. Click read more for some GCSE style questions to go with the story.

Questions

1. Explain why the government puts excise duties on some goods, such as soda. (3)

2. Do you agree that soda should be highly taxed? Give reasons for your answer. (6)

3. Do you think an increase in the price of soda will reduce demand? Give reasons for your answer. (4)