A minimum unit price (MUP) on alcoholic drinks was introduced in Scotland in 2012 and in Wales in 2020. A sugar tax was introduced in the UK in 2018. Taxation is widely used by governments to reduce the smoking of tobacco products. All of these are examples of government intervention on markets to reduce consumption of goods which are considered “socially harmful”. Discuss first how these policies affect consumption, consumer surplus, producer surplus and total market surplus. Discuss then the motivations and the legitimacy for governments to intervene on these markets, and any alternative (or complementary) measure governments may adopt to pursue their goals.
BUSI4468 - Business Economics Coursework This individual take-home coursework will form 100% of your mark for the module. Your essay must be word-processed (imported pictures of your hand-drawn graphs are ok) and must respect a word-limit of 2000 words. Exceeding this limit will attract marks penalties and the exceeding parts will be disregarded. Please report an accurate word count of your essay on the title page. Your essay should display a clear structure and demonstrate reading beyond lecture notes and module texts. It must therefore include a list of references. For all questions, you might want to expand your reading starting with any paper indicated as additional reading in the relevant Worksheet for the topic and available on the Moodle page of the module (relevant lecture/topic section). QUESTION: A minimum unit price (MUP) on alcoholic drinks was introduced in Scotland in 2012 and in Wales in 2020. A sugar tax was introduced in the UK in 2018. Taxation is widely used by governments to reduce the smoking of tobacco products. All of these are examples of government intervention on markets to reduce consumption of goods which are considered “socially harmful”. Discuss first how these policies affect consumption, consumer surplus, producer surplus and total market surplus. Discuss then the motivations and the legitimacy for governments to intervene on these markets, and any alternative (or complementary) measure governments may adopt to pursue their goals. General criteria and advice 1. Please read the guidelines on general essay writing from your course induction and handbooks. Markers will be expecting you to adhere to them. 2. The focus of this course is on basic economic principles and approaches, and a desirable outcome is that you gain and demonstrate a solid understanding of these, and the ability to apply them to different settings. The coursework is intended to give you scope to exhibit this ability, and this will be reflected in the mark you receive. 3. The coursework questions are all essay type questions on topics well covered and discussed in the course material. However, your answer should clearly reflect your independent elaboration on the topic, supported by you research of sources, and making use of the economics approach and logic. You are not supposed to summarise and report all possible big or small points. You need to find your angle to elaborate on the topic, certainly paying attention that the most relevant aspects are covered, but also using your own research to go deeper on some of them. Critical assessment and observations are really welcome but must be grounded on robust economic logic and arguments. 4. For background content you might want initially to look at the relevant parts of the lecture notes, textbooks, worksheets, and our LE videos. But then you should extend your sources, maybe starting from (but not limiting to) any relevant additional reading indicated in the worksheets and accessible from Moodle. Choose your sources carefully. Try to confine your research to texts, academic literature, and reliable sources of empirical evidence. A recent review article on the relevant subject matter is a good place to start - from that you can follow up on the useful-looking references. Please don’t include material from Wikipedia or blog posts - they are not generally reliable sources and you will be liable for errors which result. There is no hard and fast rule but try to reference at least 5 relevant academic sources. 5. The use of diagrams and numerical example is neither compulsory, nor prohibited. It is, however, often the case that diagrams and examples are the most concise way of getting an argument across. So, in those cases, why not using them? Drawing your graphs and insert them as a picture in the document is fine. 6. Few marks, if any, are available for purely factual material. Please resist the temptation to spend much time setting background and keep this to a minimum. One or two sentences should be enough if you feel it necessary to provide generalities on how important and impactful the topic is. 7. You can of course use appendices, although it is unusual for this to be appropriate in assignments of this nature. They do not count against the word limit. But remember that the point of an appendix is to provide additional extraneous material outside the main scope of discussion, for the reader (and marker) to refer to optionally. So don’t use the appendix as a way of including material if you are over the word limit in the main text. 8. Please do not try to shy away from answering the topic set. You can only be awarded marks for the material which can be deemed relevant to the topic. 9. Be clear that this is an essay in the discipline of economics; avoid straying into other territory. 10. Try to assess arguments as an economist. One often reads something along the lines of, for instance, “. . . allowing free trade in such a case would be beneficial because it increases small farmers’ profits”. The problem here is not that the statement about the effect on profits is false, which it may not be, but that the conclusion is made that, as a result, free trade is beneficial. An economist would want to know if there are any other relevant effects and also to qualify what is meant by beneficial. For instance, what might work here could be “. . . allowing free trade in such a case would increase farmers’ profits, and although consumers would suffer, the loss to consumers would be outweighed by the gains to producers. Such a policy would therefore be economically efficient as it would increase the total surplus to the market participants”.