Reference no: EM132286939

Case 1: Read the case scenario as, "SODA TAXES: A HUGE DEBATE'''.

Around the world, governments and beverage makers are locked in battle over taxes on surgery drinks. Soda taxes have become a weapon of choice among public-health advocates: In the past year alone, six U.S. cities and counties have begun targeting sugar intake by taxing sugary beverages. But while there's evidence that these measures reduce soda consumption, economist say there is a very simple way to more effectively reduce sugar and sweetener intake. In a nutshell, don't tax the soda tax the soda tax the sugar it contains. According to a new research report by urban Institute, such an approach would reduce both sugar consumption and consumer burden more than the volume taxes which tax beverages by the fluid ounce, that are favored by cities and countries across the United states. What's more, they might also encourage manufactures to reformulate some high sugar beverage. " The whole point is this:" said Donald Marron, who directs economic policy initiatives at the Urban Institute. "If you're going to have taxes on soda, and if those taxes are motivated by sugar, then the tax should be on the amount of sugar."

Answer the question that Many countries are trying to impose tax on soda beverages to reduce their consumption. Being an economist, suggest the right effective policy.

Case 2: Does who control household income make a difference?

In the mid- 970s, the United Kingdom made an interesting policy change in its -child allowances policy. This program provides a fixed amount of money per child to every family, regardless of family income. Traditionally, the child allowance had been distributed to families by withholding less in taxes from the paycheck of the family wage earner-typically the father in this time period.

The new policy instead provided the child allowance as a cash payment to the mother. As a result of this change, households have the same level of income and face the same prices in the market but the money is more likely to be in the purse of the mother than in the wallet of the father. Should this change in policy alter household consumption patterns? Basic models of consumption decisions, of the sort examined in this chapter, assume that it does not matter whether the mother or the father receives the money, because both parents seek to maximize the utility of the family as a whole. In effect, this model assumes that everyone in the family has the same preferences. If women are hardwired to care more about their children than men, then it must be true that children will be better off if their mother has more say in how household resources are distributed within the family. The most effective way for a woman to increase her say in how the family's income is ent is by actively contributing to household income through waged employment. At the same, the level of care from their mothers is unchanged relative to if she was not in the workforce, cause that level of caring is biologically determined. In reality, the share of income controlled the father or the mother does affect what the household consumes. When the mother controls a share of family income a number of studies, in the United Kingdom and in a wide variety countries, have found that the family tends to spend more on restaurant meals, child care, women's clothing, and less on alcohol and tobacco. As the mother controls a larger share of household resources, children's health improves, too. These findings suggest that when providing to poor families, in high-income countries and low-income countries alike, the monetary it of assistance is not all that matters: it also matters which member of the family actually the money (see Figure 1). The figures show the financial benefits or child allowance per family in different countries.

a. What is the central issue the case study is highlighting regarding,"child allowance" policy?

b. What is the practical implication when receiving the monetary assistance from government?