Question

w a diagram to illustrate your answer. 21. Health minister Zulkiflee is concerned about obesity in the country. Parliament is considering two plans. One will reduce the production and sale of junk food." The other will increase nutrition- education programs and include substantial advertising campaigns to encourage healthy eating habits. The junk-food reduction program a. and the education program will reduce the quantity of junk food sold and raise the price. b. and the education program will reduce the quantity of junk food sold and lower the price. c. will reduce the quantity of junk food sold and raise the price. The education program will reduce the quantity of junk food sold and lower the price. d. will reduce the quantity of junk food sold and lower the price. The education program will reduce the quantity of junk food sold and raise the price. Draw diagrams to illustrate your answer.

Answer 1

One of them, the junk food reduction program focuses on the supply side by reducing the supply of junk food. This decreases the supply and shifts the supply curve leftwards. Price is increased and quantity sold is reduced.

Effect of a decrease in the supply Price($) S'S' Supply curve SS PoE Demand curve DD Q1 Q0 Quantity

The other program, that spreads awareness about the health hazards of junk foods, decreasing its demand. This shifts the demand curve to the left, thus, reducing the price and the quantity sold. Option C is correct

Price($) Supply curve SS Pl Demand curve DD D'D Q1 Q0 Quantity