Question

According to standard economic theory which is true?

a. Choices people make, including the choice to eat French fries or smoke, should be respected as long as these choices do not affect others.

b. Taxes on sugary sodas force consumers to make decisions that are privately confusing.

c. Public intervention is always justified as long as the prevalence of the problem is large

d. Obesity is a public problem, not a private problem, because it is associated with reduced life expectancy.

Answer 1

A.Choices people make, including the choice to eat French fries or smoke, should be respected as long as these choices do not affect others.

Reason- Individual choices should be respected as they are based on utility function which is different for everyone. These choices should be respected onky as long as they do not create any negative externality for others.