https://www.forbes.com/sites/benjaminlaker/2020/04/07/3-severe-implications-of-coronavirus-on-global-trade/#4673fcba3d11https://www.lowyinstitute.org/the-interpreter/facts-about-global-trade-face-masks-ventilators-and-test-kitshttp://www.oecd.org/coronavirus/policy-responses/the-face-mask-global-value-chain-in-the-covid-19-outbreak-evidence-and-policy-lessons-a4df866d/https://www.aspistrategist.org.au/how-covid-19-infected-global-trade/https://theconversation.com/coronavirus-hasnt-killed-globalisation-it-proves-why-we-need-it-135077https://theconversation.com/sure-lets-bring-production-onshore-but-it-might-not-ensure-supplies-142270These are some of the links that have been given for the assignment use.
T2 2020 MAE101 Written Assignment MAE101 – Economic Principles - Trimester 2 2020 Assessment Task 1 – Individual Written Assignment DUE DATE AND TIME: Thursday 3 September 2020 by 8:00pm (AEST) PERCENTAGE OF FINAL GRADE: 30% WORD COUNT: 2000 words Description The global COVID-19 pandemic has resulted in domestic shortages of many goods ranging from toilet paper to medical supplies. This can be attributed to both soaring demand and disruption of supply chains. It has also brought international trade into focus, with some countries acting to ensure medical supplies (including supplies of face masks and ventilators) for their own citizens by banning or limiting the export of these goods, and even outbidding or seizing orders intended for other countries. Meanwhile international organisations such as the Organisation for Economic Cooperation and Development (OECD) and the World Trade Organization (WTO) warn about the dangers to world well-being and stability of abandoning rule-based trade systems. The assignment is in three parts. Parts I and II are about using economic tools and concepts you have learnt in topics 1 to 3 of this unit. In Part I you will use the supply and demand model to analysis the impact of a sudden increase in domestic demand on face masks, and then combine this with the impact of disruption of supply chains. Part I will not specifically address international trade in masks; you be required to focus on the domestic market instead. In Part II you will discuss the gains from trade in a general sense. Parts I and II of this assignment address ULOs 1 and 2 (GLOs 1 and 3). In Part III you will be required to read some articles about face masks, trade and globalisation, and analyse the economic arguments put forth. Part III requires critical analysis which draws on and makes reference to relevant economic concepts and tools from Topics 1 to 5 of this unit, as well as general findings and conclusions from Parts I and II of this assignment. Part III addresses ULO3 (GLOs 4 and 8). Part I Demand, Supply and Equilibrium Question 1. For this question you will be drawing three supply and demand diagrams to illustrate changes in the domestic market for face masks (ignoring international trade aspects) during the COVID-19 pandemic. 1a) Your first diagram should illustrate the domestic market for face masks both before the pandemic and also after the initial increase in demand. 1b) Reproduce the diagram you drew for part (1a) and add to it to illustrate the impact of a reduction in the availability of raw materials. 1c) Now assume several domestic companies that weren’t previously making face masks now start face mask manufacture. Redraw your diagram from part (1b) to illustrate this additional impact on the market for face masks. Page 2 of 10 1d) The price of face masks has increased in Australia since the start of the pandemic, and the quantity sold has also increased. With this in mind, explain fully the impact of the pandemic on the domestic market for face masks. Include an explanation for each of the separate impacts detailed in parts (1a) to (1c) referring to the changes illustrated in your diagrams, including an explanation of how the market adjusts to a new equilibrium price and quantity after each change. Also explain how each of these changes contributes to the overall impact on the equilibrium price and quantity of face masks in Australia. Question 2. In part (1a) above you drew a diagram to illustrate the increased demand for masks after the pandemic. It is likely that not only would demand increase, but the price elasticity of demand would also change as a result of the pandemic. Explain how and why the price elasticity of demand is likely to change, and how this will affect the demand curve you have drawn in part (1a). (No need to illustrate). Specific Requirements for Part I Each of your diagrams must be fully labelled: both axes, all curves, all prices and quantities labelled on the axes and each equilibrium point. Each diagram must have a heading. Use letters such as P1 and Q1 or similar, rather than actual price and quantity numbers. Diagrams must be created electronically. There is a video in the Topic 2 folder which demonstrates how supply and demand diagrams can be drawn in Powerpoint and copied and pasted into a single document. Part (1d) requires a brief introduction, 3 brief paragraphs to explain each of the 3 diagrams (which curve moves and why, how the market price and quantity adjusts as a result of the change) and a concluding paragraph that explains the overall impact on the market for face masks. No more than 500 words for part (1d). Check your writing for grammar and spelling. Marks will be deducted if your ideas are expressed poorly or are confused, and cannot be awarded if your expression is ambiguous. Overly wordy answers that include irrelevant information will also be penalized. Question 2 is a stand-alone question – one sentence only required. No need to refer to Question 2 in part 1d); that is, answer all parts of Question 1 assuming price elasticity of demand does not change. Part II Opportunity cost, comparative advantage and gains from trade Question 3. Ali and Barb both like making bread and jam. In one day Ali can make 10 loafs of bread OR 20 jars of jam. In one day Barb can make 6 loafs of bread OR 36 jars of jam. 3a) What is Ali’s opportunity cost of making 1 loaf of bread? (Include a definition of opportunity cost). 3b) What is Barb’s opportunity cost of making one loaf of bread? 3c) If they both split their time evenly between bread making and jam making, how many loafs of bread and jars of jam would they each have? 3d) If Ali only made bread and Barb only made jam, how many loafs of bread and jars of jam would they have between them? 3e) If Ali only makes jam and Barb only makes bread, how many loafs of bread and jars of jam would they have between them? 3f) Assume Ali and Barb specialize in their comparative advantage good, and then agree to trade 3 loafs of bread for 12 jars of jam. How many loafs of bread and jars of jam do they each have now? Page 3 of 10 3g) Has specializing in their comparative advantage good made them better off overall? Explain your answer fully, including explaining what is meant by ‘comparative advantage’. Specific Requirements for Part II: Parts (3a) to (3f) require one sentence answers. Show workings for parts (3a) and (3b). Part (3g) requires one to two paragraphs including a full explanation. No more than 200 words for part (3g). Part III Face masks, Trade and Globalisation Your task is to write a report/written presentation for a class of year 11 or 12 students who may or may not be studying economics. Assume you have been asked to address this question: “Should Australia move away from globalisation and make all our masks and other medical supplies ourselves?”. Your report/written presentation should start by briefly discussing what has been happening in the domestic face mask industry, drawing on (but not simply repeating) your work from Part I. You then need to explain the international dimensions, providing a clear and succinct summary of relevant issues presented in the articles (links provided below). Then critically analyse the question based on your reading of the articles and any further reading/research you have undertaken. Make reference to economic concepts in your analysis, particularly those relating to welfare implications of trade, both from Part II of this assignment and Topic 5 of this unit. Specific requirements for Part III Your answer to Part III should be written in the style of a report/written presentation. It should have an introduction and conclusion, and be structured to address the points noted above. Your critical analysis should identify and discuss the issues that are inherent in the question. Any claims you make must be backed up with evidence from your reading. Your conclusion should bring your ideas together in a paragraph that is aimed at your audience – non specialists – in a clear and concise way. You must include Harvard style in text referencing (author, date) for any ideas that are not your own, including referencing ideas from the articles you have read. However general economic concepts such as those in the text book do not need to be referenced, if they are expressed in your own words. You must also provide a reference list at the end of Part III. You do not need to summarise every article provided below as reading. A key academic skill is the ability to research information from many sources, and organise, analyse and present information relevant to the topic. No more than 1000 words for Part III. Check your writing for grammar and spelling. Marks will be deducted if your ideas are expressed poorly or are confused, and cannot be awarded if your expression is ambiguous. Overly wordy answers that include irrelevant information will also be penalized. Marks for each part: Part I: 4 + 4 + 4 + 14 + 4 = 30 points for Part I Part II: 4 + 2 + 2 + 2 + 2 + 2 + 6 = 20 points for Part II Page 4 of 10 Part III: 30 points; plus 5 points for the quality of writing and 5 points for complete and correct referencing = 40 points for Part III. This gives you a score out of 90. From this the following deductions may be made if applicable: • Not submitting your assignment in PDF format: minus 3 points • Not doing the diagrams in Part I digitally: minus 4 points • Required labels missing for Part I: minus up to 3 points • Restating the question (that is coping the complete question to your assignment document, rather than just using the part and question number): minus 3 points Your final score out of 90 will be