Answer to Question #238873 in Microeconomics for AUSTINE

Question

6. Explain the effect on the production of ice cream, if the price of raw milk decreases.

7. Explain why government applies sin taxes on goods that are bad for your health (and addictive), for example alcohol and cigarettes.

Answer 1

6)The supply of ice cream will increase.

7)The government applies taxes to goods that are harmful to people's health so as to discourage their consumption since the price will rise