Question

1. Can you think of a case where non-economic determinants (i.e., factors other than commodity prices and the consumer’s income) can have a major impact producing changes in consumer demand for a commodity? Given an example
2. Why have some experts suggested a tax on sugar-sweetened beverages as a way of reducing obesity among teenagers? What factors be involved in determining the amount by which obesity is reduced?

Answer 1

Price is not only the economic variable that affect demand ..Demand is also determinant by number of non price factor .They are:

1)The need of consumer : If the good /service is necessary then ,assuming that consumer has suficient income , he is willing to buy that product /service .Some need like the need for food are common while other needs are specific such as medicine .

2)Consumer habit , preference,and fashion :Taste can change over time .Demand can increase or decrease to reflect these changes .Eg : cigarette smoking is much less fashionable than it used to be .

3)Brand loyalty :Consumer may loyal to particular brand .Brand give consumer confidence and take some of the risk out of purchasing .

4)Expectation :consumer expectation can influence the demand for many items .This is expectionally true with expensive and luxuary goods include the demand for housing, motar car

5)Natural factor : The impact of good and bad weather determined impact on demand of particular goods likeice cream ,rain coat

6)The price of subsitute goods : subsitute goods can greatly affect demand An increase in one brand of car is likely to result in an increase the demand for subsitute brand

Beverage tax came into light with increasing certain about obesity , particularly among youth.The consumption of isotonic,regular soft drinks ,fruit juice , affect our heath.A tax on Sugar sweetened beverage (SSB) has proposed to address the population on weight gain .SSB tax can enchance welfare across society as a whole to reduce unhealthy consumption and increase tax that lead to revenue

FACTORS THAT REDUCE THE OBESITY

Obesity is a public problem .various factors that can reduce obesity .They are:

1)encourage eating slowly and only when hungry

2)Make sure everyone is getting enough sleep .

3)Engage in regular aerobic activity

4)Limit unhealthy food in household

5)Eat healthy food