•    This MS1 Assignment is worth 10% of your final marks.

•    To be submitted by 5pm Monday 20th Nov 2023 via Turnitin. A penalty of 10% per day will apply for late submissions.

•    It  is  expected  you  will  use  accurate  economic  terminology,  use  economic  reasoning  and analysis, and include relevant diagrams in your answers/report/ case study.

•    It is expected that you will do your own work yourself. You will have to sign a “Statement of Authorship” to this effect.

•    Marks will be awarded for quality, thoroughness, consistency, and coherence of discussions.

•    Present your findings in a word-processed report format via Turnitin. Your report should include tables, diagrams, photos, and charts/graphs (of your data) as appropriate.

•    Acknowledge the  source(s) from where you got the information (including lectures notes). Please follow the APA referencing style (taught to you in EAP). APA referencing help sheet is uploaded for you on TCOLE.

•    Use the link below to cite/acknowledge the material you learnt from lecture slides.

https://library.unimelb.edu.au/recite/apa7/lecture-notes

•    If you have not used Turnitin before, don’t worry. Your tutors will guide you.

•    Marking rubric is provided on pages 5-6.

•    You will have to adhere to academic integrity and sign the ‘Statement of Authorship’ (declaring you have not engaged in cheating and/or plagiarism) when you upload your written work.

Activity 1: Economic system

Introduction

An economic system is a fundamental framework that defines how a society organises its production, allocation, and distribution of goods and services. Economic systems play a pivotal role in determining how resources are utilised, how wealth is generated and distributed, and how decisions about what to produce, how to produce, and for whom to produce are made.

The choice of an economic system can significantly influence a nation's economic performance, level of economic freedom, income distribution, and overall prosperity. As such, understanding the concept of economic systems is essential for economists, policymakers, and citizens alike.

Scenario

A country called Dreamland that has recently undergone a significant political transition. For decades, Dreamland operated under a centrally planned economy. However, a new government has taken power, pledging to shift towards a market-oriented economy.

Question 1

•    Discuss two challenges and two opportunities Dreamland might face during its transition from a centrally planned economy to a market-oriented one. OR

•    Analyse two  potential  benefits and two drawbacks of  this  economic  system  change  for Dreamland’s citizens and its overall economic development. (2 marks)

Activity 2: Concept of elasticity- Price elasticity of demand

Introduction

Price elasticity of demand is a fundamental concept in economics which helps us understand how consumers  react  when  the  price  of  a  product  changes.  This  concept  is  crucial  for  businesses, policymakers,  and  economists  as  it  provides  insights  into  the  dynamics   of  market  behaviour. Specifically, it allows us to categorize goods as either elastic (responsive to price changes) or inelastic (unresponsive to price changes), and it helps in making informed decisions regarding pricing strategies, taxation policies, and understanding consumer behaviour in various economic scenarios. In short, price elasticity of demand plays a vital role in shaping economic decisions and understanding the intricacies of supply and demand in markets.

Scenario:

One published nutrition study suggests that boba tea drinks are part of the larger group of sugar‐ sweetened beverages (SSB) because these beverages are usually sweetened with high‐fructose corn syrup (HFCS). The high caloric and sugar content of boba beverages pose public health concerns as they have the potential to further exacerbate the childhood obesity epidemic. Nutrition education targeting Asian populations should give special attention to boba tea as an SSB.

(Source:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5217910/)

The Australian government is considering implementing a taxon boba tea drinks to combat rising rates of obesity and related health problems. As an economist advising the government, you are tasked with assessing the potential impact of this tax on both government revenue and consumer behaviour.

Question 2:

•    Using the concept of price elasticity of demand, analyse whether the demand curve for boba tea drinks is elastic or inelastic. Provide 2 reasons to support your answer.

•    If  the  Australian   government  implemented  a  tax  on  boba  tea   drinks,  how  would  the government's tax revenue and the quantity of the beverages consumed change? (4 marks)

Activity 3: Analyzing competitive markets using demand-supply diagrams.

Introduction

One way to look at how a competitive market makes decisions and allocates resources is using demand- supply diagrams, which are used to illustrate how buyers and sellers of a good or service help determine the market price  and the  quantity  sold.  In Australia’s  market  economy,  demand  and  supply  help determine prices that, in turn, signal to owners of resources how those resources should be used.

Question 3

Winter crop production for coffee beans in Vava Land is expected to decline to 15% below the 10-year average to 2022–23 of 46.4 million tons and yield prospects are forecast to be below average due to the expectation of below average rainfall for winter and spring.

How would the price and quantity change in each of the markets listed below? Support your response with a diagram for each market.

•    Coffee •    Tea

•    Household coffee machines (4 marks)

MARKING RUBRIC