According to the United Nations Food and Agriculture Organization, the adult obesity rate in Mexico is higher than that of adults United States, with an obesity rate of 32.8% compared to 31.8%. Junk food and sugary drinks have caused an increase in this rate, which makes them negative externalities of consumption, meaning that the private benefits to consumers of a good are greater than the social benefits of its consumption, in other words the well it creates spillover costs on a third party. The Mexican government imposed a tax, which is a payment made by an individual or business to the government, to eliminate these negative externalities. The tax is expected to decrease demand for the good. Cross-price elasticity, the measure of the responsiveness of consumers of one good to changes in the prices of another good, fast food products and healthier goods, gives us an idea of ​​the possibility of reducing obesity rates. Sugary drinks and junk foods are considered in this article as negative externalities of consumption, creating externalities such as increases in public health care, which feed into government costs. The problem addressed is obesity and therefore the costs of consuming the good create a problem of increased fat intake, which creates other long-term problems. In the diagram above we see that the marginal social benefit is less than the marginal private benefit. This shows that sugary drinks and fast food are consumed in excess of the social optimum. At Qe equilibrium the social benefits of consumption are less than the marginal private benefits and social costs, which shows that society benefits less than the actual consumers of the good. Society would benefit where MSB = MSC, at this point we have eliminated the e...... middle of paper ...... food commodities higher than healthy foods, we should expect an increase in demand for foods healthier, which is a positive externality of production. This will reduce obesity rates in Mexico. If you wanted to argue against imposing a tax, you could argue that this policy could harm the less fortunate. Fast food products are considered cheap goods and therefore poor people tend to purchase these goods instead of healthy and expensive goods. The corrective tax makes these goods much more expensive for them, so they struggle more than before when it comes to purchasing food. Producers of such goods also suffer losses due to the decrease in their surpluses. Manufacturers who are unable to make much profit are then forced to decrease production, which takes the lead when industries lay off workers. An increase in unemployment rates does not benefit society.