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'The government was advised to consider introducing new taxes on disposable fast-food containers, cans and plastic bottles.' (Source: The Irish Times, July 2016) Outline one possible economic advantage and one possible economic disadvantage of this measure - Leaving Cert Economics - Question 8 - 2017
Question 8
'The government was advised to consider introducing new taxes on disposable fast-food containers, cans and plastic bottles.' (Source: The Irish Times, July 2016) Ou... show full transcript
Worked Solution & Example Answer:'The government was advised to consider introducing new taxes on disposable fast-food containers, cans and plastic bottles.' (Source: The Irish Times, July 2016) Outline one possible economic advantage and one possible economic disadvantage of this measure - Leaving Cert Economics - Question 8 - 2017
Step 1
Economic advantage:
Answer
One possible economic advantage of introducing taxes on disposable fast-food containers, cans, and plastic bottles is the potential increase in revenue for the government. This revenue can be utilized for various public projects, such as environmental initiatives or infrastructure improvements. By implementing a tax on these disposable items, the government encourages businesses to adopt more sustainable practices. This may lead to reduced waste and encourage consumers to be more mindful of their purchasing habits, thereby promoting a cleaner environment.
Step 2
Economic disadvantage:
Answer
A possible economic disadvantage of this measure is the increase in prices for consumers who buy fast food or beverages in disposable containers. Higher prices may result in decreased demand, potentially harming businesses that rely on these sales. Additionally, small businesses that may struggle to absorb the cost of the tax could face financial difficulties, leading to layoffs or even closures. This regressive tax could disproportionately affect lower-income consumers, who may find it more challenging to afford these increased costs.