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Please help, the answer has to be well founded. Thanks
JUNK FOOD AND GOVERNMENT ACTION
Recently there has been discussion in the news about taxing junk food (soft drinks, for example) in an effort to reduce the incidence of obesity in the U.S. Do you think the demand for junk food is elastic or inelastic with respect to price.
Based on your knowledge of the price elasticity of demand, do you think the deadweight loss of a soda/junk-food tax would be relatively large or relatively small? Why? Do you think taxing junk food would be a good idea? Based on your analysis, would it really help reduce the number of obese people in the United States? Explain.
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Demand for good 1 is : Q1d = 1000 - 5p1 + 0.1*p2 +0.06*Y, where p1 is the price of good 1 , p2 is the price of another good 2 ,and Y is income, and my question is why good 1 is normal good?
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