For CONTEXT 2...
First i defined free market economy and why government would intervene
Then i said that healthy foods are merit goods.. I drew the merit good diagram and showed there was underconsumption. Thus, there is market failure and the government should intervene.
Then said gov could intervene by taxing unhealthy foods, however fatty foods may be inelastic.. quoted that from the text. Also taxation could have a negative effect on employment in the long run. Taxing could lead to a black market. I quickly squashed in that the revenue from tax could be used for subsidies.
Then said another policy could be reuglation. Quoted the thing about not having fast food restuarants at sporting events. Said this could cause regulatory caputure, very costy to the government. Possibility of gov failure.
Against- people believe it should be left to the free market, Adam Smith, and that government intervention can disort the signalling function.
Also intervening is wasting money that the gov doesnt have.
Finally to conclude said the gov should intervene by using advertising and taxing unheadlthy foods.. This will benefit in thr LR with a fitter population.
What do you think? What marks would it be around? Im hoping to get atleast a B! Thanks