Australia Economic

Task. Choose a real-world market and ﬁnd a real-world business that operates in that mar-
ket. Write a 1,000 word essay using the tools of economic analysis to describe and explain,
and relevant diagrams to illustrate how a current or upcoming domestic and/or international
government policy could aﬀect the business and its competitiveness.
1) Brieﬂy describe the nature and characteristics of the chosen business.
2) Which market structure does the market you chose possess?
3) Describe some plausible cause(s) why the government may want to inﬂuence the market
price, and explain by which means it could achieve this. How would this impact suppliers
and consumers in the market?
4a) Describe one real-life example of government intervention in the market. What do you
think the intervention was meant to achieve?
4b) How do the price elasticity of demand and the price elasticity of supply aﬀect the mag-
nitude of the impact from this market intervention?
4c) Overall, who is likely to beneﬁt and who likely to be disadvantaged by the intervention
from 4a)?
Instructions. Please follow these instructions carefully. Any violation of these instructions
(e.g. word count missing) may lead to a penalty of 1 mark.
• Your front page has to include a word count, your ﬁrst name, your family name and
your student number.
• Use 1.5 line spacing or double line spacing. Fonts have to be easily readable, including
those used for ﬁgure captions.1
• The last page of your essay must consist of a signed and fully completed Economics
Assignment Cover Sheet, available from the Blackboard course website.
Any standard font and font size should do. However, if I need a magnifying glass to read a ﬁgure caption,
the font size is too small…
Marking. Your mark will be inﬂuenced by
• Content: relevant to the question, sound interpretation and understanding of economic
theory.
• Clarity of argument: logical thinking, clarity and coherence.
• Fit of the theoretical model to the real-world market and business chosen. Fit of the the-
oretical analysis of the government intervention to the real-world example of government
intervention.
• Use of relevant diagrams to illustrate your arguments.
• Evidence of reading outside of the textbook.
• Use of references: correct referencing format in your essay and also in the bibliogra-
phy/references at the end of your essay. You should provide at least 5 references includ-
ing your textbook.
• Writing style: correct grammar and spelling; no long sentences and pompous words; use
of quotations, if necessary, must be prudent.
• Presentation: adherence to the guidelines described in the previous paragraph.
Check-List and Hints. Here a few guidelines for you essay. I recommend that you read
them before you start, and also that after you wrote a ﬁrst draft of your essay, you check your
draft against each bullet point.
• The main goal of the essay is not to reproduce a textbook analysis, but rather to apply
your knowledge of (theoretical) economic models in one speciﬁc, real-world case. Is the
analysis of the real-world example the centre piece of my essay?
• Is my writing focused (free of unnecessary information) and do I explain my claims
well? Imagine that you write this essay for your CEO. Say you write about Widget
Empire Australia2 , an Australian subsidiary of Widget Empire Inc., a world-leader in
the production of widgets operating in dozens of countries. You are analyzing the eﬀects
of an import tariﬀ on widgets passed by the Federal Parliament last year.
– Your CEO never took ECON, so she relies on your expertise. It is important
that you underpin your claims by factual information and logical analysis. For
example, your CEO may be frustrated if you just write
2
Of course, your essay should be about a real-world company.
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Econ

“The demand for widgets is relatively inelastic,”
because she cannot really evaluate that claim. She would much prefer that you
explain and justify your claim. For example,
“The demand for widgets is relatively inelastic in Australia. This is because
widgets are an essential tool for anybody living close to a beach (like the
majority of the Australian population), and there are no good substitutes
for widgets. Walter Widget (2013) estimates the elasticity of the demand
for widgets to be 0.13.”
Later, in your bibliography, you can provide the exact reference:
“Walter Widget (2013), ‘Widgets for Everybody,’ Widget International Press,
2nd edition.”
– Your CEO is a very busy person. She wants to understand the consequences of
the import tariﬀ on widgets in the shortest amount of time possible. Hence it is
important that your essay is as focused as possible. For example, a brief description
of the nature and characteristics of Widget Empire Australia is useful background
information that helps provide context of your main analysis. For instance, it may be useful for justifying why you based your analysis on the economic model of
a monopoly. However, a history of Widget Empire U.S.A., the U.S. subsidiary of
Widget Empire, may not be necessary to understand your analysis of the Australian
widget market. Your CEO would prefer you skip a description of Widget Empire
U.S.A., as she does not need to understand Widget Empire U.S.A. for the issue at
hand.
• Do I explicitly name the one policy whose eﬀects I analyze? Is this policy a real-world
example (and not just a hypothetical example)?
• The market structure describes the conditions of a market, e.g. whether a market is
perfectly competitive, a monopoly, monopolistic competition, or an oligopoly.
– State which model you base your analysis on. E.g., you may claim that the business
and market you chose are best described by the model of a monopoly. Or, alter-
natively, that the model that ﬁts best is that of a perfectly competitive market.
Etc.
– It is important that you justify your choice of the model of a market structure.
That is, answer why say the monopoly model (and not say an oligopoly model) is
the appropriate model to base the analysis of your chosen business and market on.
Ask yourself: does the model I use for my analysis match my real-world example well?
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Econ
• Is my essay well-structured? A clear structure makes your essay easy to read. While
not required, a simple tool that helps with that is to split the essay into diﬀerent sections,
e.g. (a diﬀerent number of sections might be appropriate for your essay)
1. Widget Empire Australia: A Brief Overview
2. Possible Government Interventions in the Market for Widgets
3. Australian Import Tariﬀ on Widgets and Their Impact on the Price and Quantity
of Widgets
4. Winners and Losers from the Introduction of the Import Tariﬀ
5. Conclusion
Here, the ﬁrst section would brieﬂy describe the chosen business. The second section
would brieﬂy describe possible government interventions. This section would not be the
core of the essay. The next two sections would be the core part, and describe one real-
world government intervention and its impact on the market outcome, as well as provide
an analysis of who wins and who loses from the intervention. The ﬁnal section would
provide a brief conclusion.
• Have I cited sources for all data that I present? It is not good to just write
“Widget Empire Australia’s sales increased by 50% in 2014.”
Rather, provide a source for you claim
“Widget Empire Australia’s sales increased by 50% in 2014 (Walter Widget,
2013).”
and later reference Walter Widget (2013) in your bibliography.
• Have I labeled all ﬁgures?
• Have I explained all ﬁgures in the text? — It is not enough to just add some ﬁgure
to your essay. You also have to explain to the reader what the ﬁgure means, and what
conclusions you draw from it.
• Are all my sentences grammatically correct? In general, it is good practice to use plain
English rather than complicated expressions and complicated sentence structures.
• Please be very sure to not plagiarize your essay, or even parts of it. Copying from others,
from textbooks and internet sources is unacceptable (without proper citation) and can
have serious consequences.

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