Assume that a 2 cent per ounce percent soda tax led to a large increase in its price and only a small decrease in the quantity of soda demanded.Economic analysis would lead one to conclude that
A)soda should be taxed because the benefits of the tax would exceed the costs.
B)soda should not be taxed because the benefits are uncertain.
C)soda should not be taxed on ethical grounds since ethical benefits and costs can't be measured.
D)the benefits of taxing soda is a normative issue. Economic analysis can be used to contribute to discussion of this issue but cannot decide it.

Question

Quizplus · Accepted Answer

Economic analysis can provide information on the effects of a soda tax, but ultimately the decision to tax soda is a normative issue based on ethical and political considerations that cannot be fully decided through economic analysis alone.

Assume That a 2 Cent Per Ounce Percent Soda Tax