Evidence C & D

1. Evidence C & D Economics and Business Unit 4 - Obesity

2. Evidence C – Sports Drinks • 1 in 5 Britons drink sports drinks at their desks • Average drink takes 20 minutes to burn off • The drinks contain high caffeine levels which are linked to heart problems and behavioural disorders • The market is worth £260 million

3. Market Failure? Market failure refers to situations where the free market forces have led to an inefficient allocation of resources • Externalities – Merit & Demerit goods • Asymmetric knowledge • Labour market failure • Missing markets • Lack of competition • Unstable goods

4. Evidence - C For evidence C there market failures: asymmetric knowledge and externalities. Asymmetric knowledge because the consumers are not aware of the impacts of the product e.g. 150 calories in a 500ml bottle Sports drinks are a demerit good because as a result of prolonged use there are health problems for the individual, private costs and also effecting the society, external costs.

5. ‘To intervene, or not to intervene this is the question’ YES • Providing knowledge could mean that there is less weight gain because of these drinks. Only people who exercise efficiently consume the drinks which minimising the negative effects like costs to the NHS. • Government intervention ha worked successfully in reducing use of alcohol and cigarettes because of increased tax levels.

6. ‘To intervene, or not to intervene this is the question’ NO • Blurred lines through taxing sugary drinks – fizzy pop? Brands like Coca Cola also produce energy drinks with similar calorie content. • Market is worth £260 million. Many businesses rely on this market and profit.

7. Evidence – D Healthy school meals • A plan for free school meals has been scrapped • Charities and groups are protesting against this decision • Mandatory standards mean that an average school lunch must contain at least one portion of vegetables or salad, and one portion of fruit. Fat, sugar and salt are restricted and each meal should contain minimum levels of nutrients and vitamins

8. Evidence D Families who are stuck in the poverty trap due to leakages – paying taxes and lack of spending due to debt See diagram: Cycle of income in economy

9. Free School Meals  /  • Healthy meals all children receive • Learn for future generations that eating healthily is important • Less stigma • Studies show children perform better. • Opportunity cost – high deficit = decrease spending • Capacity for schools – time / space