Principles of Economics assessment
AIMS The purpose of this task is to demonstrate your understanding of the economic concepts and models you have learned in the course in topics 2, 3 and 4 by relating them to a real world situation. Course Objectives These course objectives are covered by the assignment. CO1. Describe and utilise the fundamental tools, methods and language of economics to analyse resource allocation issues CO3. Describe the impact of incentives and use economic models to illustrate how agents and economies respond to incentives CO4. Identify the limitations of the market mechanism and analyse the role of government in affecting markets and decision-making in the general economy Framework for each answer 1. Identify the key issues in the questions provided. 2. Analyse these key issues mentioned in the article, within the context of the concepts discussed in the lectures and textbook. 3. Use the appropriate economic model to illustrate the key issues graphically. Fully label the model and clearly indicate where changes occur. 4. Explain the model and discuss the outcome. 5. Provide the list of references used in answering the questions. Task description Read the news article entitled “Hip pocket pain at the bowser as fuel above $2 a litre prompts pleas from motoring groups” by Daniel Mercer and answer the following questions. Specify any assumptions you have made and use clear, concise and coherent arguments. Wherever you use ideas from sources to support your arguments, please make sure you cite them. Please refer to page 5 for more information on assessment criteria and submission. Questions: 1.Use demand and supply models to explain and illustrate how petrol price has been affected by rising crude oil price as a result of the war in Ukraine, economy bouncing from COVID lockdowns and closure of petrol refinery facilities. You need to articulate the determinants that lead to the price changes in global oil market and domestic petrol market. (6 marks) 2.Drawing on the influences (determinants) of price elasticity of demand, explaining whether the demand for petrol in Australia is elastic or inelastic. (3 marks) 3.Illustrate the impact of the fuel excise cut on consumer’s and producer’s surplus and explain who will benefit more from the cut in light of the price elasticity of demand. (4 marks) 4. Assume truck delivery is a perfectly competitive market and a typical trucking business was break-even before the fuel price increase. Explain and illustrate graphically, the effect of change in fuel price on the short-run position of an individual trucking business. (6 marks) Explain and illustrate the long run position for a typical trucking business. (3 marks) (Hint: Your answer should include graphs for both market and individual firm. Make sure your graph for the firm includes the firm’s demand curve, marginal revenue curve, marginal cost curve and average total cost curve. Please explain the profit maximising position of a firm). 你的订单数量增加了 但是你的油耗增加了 所以总体话花销增加了 MR = MC Your assignment will also be assessed on how effectively you can communicate with the reader, i.e. how well you have presented your arguments and ensured your analysis is logical and consistent. Consequently, 2 marks will be awarded for effective writing including proper grammar, referencing and formatting. Importantly, make sure you use appropriate diagrams in your analysis. Please check the feedback form for article analysis to find out how your assignment will be marked. Hip pocket pain at the bowser as fuel above $2 a litre prompts pleas from motoring groups By Daniel Mercer Australian motorists are again paying eye-watering levels for fuel amid a global supply crunch caused by Russia's invasion of Ukraine that has swamped efforts to shield consumers from the hip-pocket pain. Prices at the bowser across Australia's capital cities are at or above $2 a litre, and higher in regional areas, sparking warnings that trucking businesses could be pushed to tipping point unless help is provided by the new Labor government. Alex Forrest from Western Australia's motoring advocacy group RAC said Russia's war in Ukraine was negatively affecting global oil supplies, while the falling value of the Australian dollar was making matters worse. ……. Under a decision by the Morrison government, the fuel excise paid by motorists was cut by half to 22 cents a litre for six months until September. It follows concerns about the effects of soaring fuel prices on the economy. …… "Without exaggerating, it's having a devastating effect on our guys," Mr Clark said. "If we can't get the price of fuel down, or we can't keep the fuel excise where it is, then I would say there would be many, many people that won't be able to continue in business. "They just can't absorb the cost." According to Mr Clark, between 20 and 30 per cent of trucking businesses were at risk of hitting the wall as the squeeze intensified. …… Mr Forrest from the RAC backed calls for an extension of the fuel excise cut or any other measures that would provide relief for struggling motorists. …... "It's right in people's faces and it's something that they have to buy regularly as well just to make their lives function. ….. The link of the full article: https://www.abc.net.au/news/2022-05-24/calls-for-more-help-as-fuel-soars-past-2-dollars-a-litre/101091962. Submission and Return of Assessment Pieces Assessment criterIa Judging the quality of submitted material requires some judgment by academic staff. Rather than a simple formulaic approach, markers combine a number of elements to judge the quality of an assignment. In broad terms, assessment of your assignments will take into account: 1. Relevance of your answer to the question (Did you answer the question?) 2. Did you use a model and graphical representation to analyse the question? 3. Clarity of expression (Is it written well?) 4. Logical planning and sequence (Does the argument make sense?) 5. Did you provide theoretical support for the arguments used? 6. Was the question answered fully or only in part? 7. Where appropriate, were sources properly cited and referenced? 8.Overall presentation, including correct grammar, spelling and punctuation (Is the presentation of professional quality?) Additional information 1. The word limit is 1350 (penalty will be imposed if the word count is more than 10% of word limit). 2. Question-Answer format is acceptable. 3. Answer each question separately. 4. Make sure to fully label diagrams; and clearly indicate changes you make to graphs. 5. Specify any assumptions you make and use a clear, concise and coherent set of arguments in your discussion/analysis. 6. There is no need to provide actual data/numbers as this is a conceptual exercise. 7. Submit your assignment in a Word file (PDF or other format is not acceptable). 8. Support your discussion with appropriate graphs. 9. Hand-drawn graphs are accepted. 10. You can make use of the snipping tool to attach your hand drawn graphs to your word file. 11. There are no resubmissions allowed. 12. In the case of requiring an extension, you need to apply online through gradebook. It is important to provide supporting document (e.g. medical certificate, letter from employer) in order for us to process your request in a timely manner. 13. Requests for an extension will not be accepted after 5:00pm on July 1 (Friday). 14. In accordance with the UniSA Business’s guidelines, assignments submitted late without permission from the course coordinator/s will attract a penalty of 2.4 marks (10% of the total marks for the assignment) per day for each day late, or part thereof, after the due date. 15. There is no need for additional references other than the textbook and the article; however, you can draw upon other references (ensure these are cited) in support of any particular arguments you make in your discussion. 16. There is no minimum number of references recommended. 17. You need to provide references, using UniSA referencing guidelines only. 2