IA (Eco) Economics IA article

[RevolutionToast]

I was initially planning on doing my Economics IA based on this article (http://archive.indianexpress.com/news/sc-refuses-to-cap-number-of-personal-cars/1151703/) and relate it to the negative externality of consumption.

However, I just came across this article (http://www.bizjournals.com/baltimore/news/2014/04/09/health-advocacy-group-wants-maryland-to-raise-the.html) which talked about cigarette taxes. I feel like this would be a more useful article for my IA. However, I was wondering if by choosing this article, in the diagrams that I draw based on negative externalities of consumption, would I have to put 2 MSC+tax curves seeing as there was already a tax implemented before they proposed to increase it?

[iamyourmum]

I don't think it'll be necessary to include 2 MSC curves since you're dealing with the new tax being imposed on the original price (which has already been taxed)

[RevolutionToast]

I don't think it'll be necessary to include 2 MSC curves since you're dealing with the new tax being imposed on the original price (which has already been taxed)

Cheers, thanks a lot!

[Black Bird Lockheed]

Hi!

From the two articles I would rather prefer to chose the article of car because if I am not mistaken the article of cigarette belongs to business journal (url is not opening), and this might create problems for you as my IB guide says that it should be from newspapers. (But if you google search the heading of the article, chances are that this article might be there in some newspapers.)

And regarding the MSC curves, it is better you show first diagram as the negative externalities of consumption and second diagram as solution to reduce this negative externality as the second diagram. Suppose the tax is already imposed ( I could not open article, sorry for that) it is better you show two MSC curves, because you need to explain the mechanism of how this tax really reduces the market failure and by simply drawing a MSC curve wont give the moderators the clear picture as if how the tax had achieved in reducing market failure. By showing two MSC curves, you could actually point out that welfare loss triangle had decreased which cannot be explained with one MSC curve. Besides if the tax is already imposed, then you don't have much to discuss and evaluate, like say that if the article says 'propose' to implement tax, you could have covered up word counts by evaluating on other alternatives like awareness campaign.

Hope this helps.

Edited April 22, 2014 by Black Bird Lockheed