Question and answer type of assignment
Microsoft Word - AF1605_Written Assignment 2_Questions_(202122S2).docx 1 AF1605 Introduction to Economics Written Assignment 2 Second Semester, 2021-22 Instructions: Ø The nominal full mark for this assignment is 40, while it carries 20% of the overall course total. Ø A Word document containing the template for the cover page is provided. Please fill in the information and type all your answers in the pages that follow. Ø Please type all your words for Turnitin checking, yet you may hand-draw or use computer tools to draw diagrams to be included as part of your explanations. Ø Do NOT include the questions in your answer file to avoid an unnecessarily high similarity index. Ø Follow the word limit in answering each question. State the number of words after each part. Ø Besides course materials, you may make reference to other publications and reliable information from the Internet to answer the questions. However, you should only make references to facts (including data) and definitions. Your arguments should be written by yourself. Ø In principle, you should include the source of reference for any points not appeared in course materials or from your own thinking. APA style is used in Economics and Business fields. (https://elc.polyu.edu.hk/referencing/APA.aspx) Ø You should complete this assignment without any help from other people. Ø Posting questions to or adopting answers from online homework-help services or websites are strictly prohibited. Ø Plagiarism will be heavily penalized. You should not copy existing published or online materials (unless they are formal definitions) or your classmates’ answers. Ø Your submission will be checked by Turnitin against plagiarism after you have submitted it to the lecture Blackboard site. The similarity index should not be above 30%. Note that the similarity index may rise some time after your submission as Turnitin reruns to check for similarity to your classmates’ work. Ø Cases with similarity higher than 30% will be examined on a case-by-case basis. Ø Please make use of the knowledge learned from this course as the basis of your answers. Ø Please use complete sentences and organized paragraphs to answer the questions. (Do not answer in point form.) Include any tables, equations and diagrams that help to explain your answers. Ø The deadline for submission is at 9pm on 3 May 2022 (Tuesday), Hong Kong Time. Ø Please make sure the file you submit before the deadline is the correct and complete file. Any resubmission of the “right” version of the file after the deadline will be taken as late. Ø Please submit your answers to your Lecture Blackboard site (AF1605_20212_A). Ø Marks will be deducted for late submissions. (4 marks per day). No submission will be accepted after 9pm on May 7, 2022. Ø Please pay attention to your email and Lecture Blackboard site for any urgent amendments to this assignment. 2 There are FOUR questions in this written assignment. Question 1 (8 marks) Use the concepts introduced in Topic 6 to discuss how you understand the crisis the world is facing regarding greenhouse gas emission and global climate change. Explain in what ways there is market failure and explain why the free-market outcome is not allocative efficient. Also, explain what kinds of remedies are in place, or you would suggest implementing, to alleviate the related problems. Real- life information (reference to news and data) that can support your answers are highly encouraged. Include appropriate diagram(s). Please answer this question within 350 words. (8 marks) Question 2 (8 marks) Home-use antigen test for COVID-19 becomes more popular in Hong Kong in the recent fifth-round outbreak with the Omicron variant. In late February, Hong Kong government started to recognize a positive result of this type of test as a valid positive. In early April, Hong Kong government gives every household twenty COVID-19 antigen test kits for free. The prices of different brands of COVID- 19 antigen test kits dropped substantially (some even more than by half) in April. Recently, the Hong Kong government announced that all primary school and secondary school teachers and students are required to take the antigen test before they go to school, starting from late April. (a) What market structure do you think the home-use COVID-19 antigen test-kits market is the closest to? Do you think the firms producing these kits will make good profit from producing this product in the long run (before people no longer need to use it)? Explain your answers briefly. Please answer within 100 words. (3 marks) (b) If you are a secondary school teacher or student, do you think it is now (April) a good time to buy more COVID-19 test kits for use in the next three months or to buy them later? Do you expect the price to increase or decrease in the next three months based on your prediction of possible development? Explain your rationale. Please answer within 250 words. (5 marks) (Note: If you are a non-local student not living in Hong Kong and find it difficult to fully understand the situation in Hong Kong, you can answer the above questions instead about the market structure and prediction on price of the country/region/city you are from. If so, please specify which country/region/city you are referring to.) 3 Question 3 (10 marks) Based on the following recommended articles or other articles from reliable sources about cryptocurrency, answer the following questions: (a) One major motive of creating cryptocurrency is to allow a decentralized medium of electronic payment. In what sense the current form of cryptocurrency is decentralized? (2 marks) (b) Currently, can cryptocurrency perform the three functions of money. Explain briefly. (6 marks) (c) Do you want to buy cryptocurrency for transaction or financial investment? Explain briefly. (2 marks) Your answer should be kept within 300 words in total for this question. (Note: Write in your own words with suitable paraphrasing to avoid plagiarism.) Recommended articles: Ashford, Kate and Schmidt, John, (2022) “What is Cryptocurrency?” Forbes Advisor. https://www.forbes.com/advisor/investing/what-is-cryptocurrency/ Scott A. Wolla, (2018) "Bitcoin: Money or Financial Investment?" Page One Economics, March 2018. https://research.stlouisfed.org/publications/page1-econ/2018/03/01/bitcoin-money-or-financial- investment/ Siripurapu, Anshu (2021) “Cryptocurrencies, Digital Dollars, and the Future of Money” Backgronder, The Council on Foreign Relations. https://www.cfr.org/backgrounder/cryptocurrencies-digital-dollars-and-future-money Question 4 (14 marks) Please answer the following questions. The three questions are not connected. (a) In the press release of the Hong Kong Census and Statistics Department on the statistics of Retail Sales in Hong Kong for January 2022 1 , it stated that, “Local consumer spending normally attains a seasonal high before the [Lunar New Year] Festival. As the Lunar New Year fell on February 1 this year but on February 12 last year, the year-on-year comparison of the figures for January 2022 with those for January 2021 might have been affected by this factor to a certain extent.” Explain why and how it would be affected within 100 words. (3 marks) 1 Hong Kong Census and Statistics Department (2022) “Provisional statistics of retail sales for January 2022 [4 Mar 2022]”. https://www.censtatd.gov.hk/en/press_release_detail.html?id=5019 4 (b) When does a continuous optimism towards future production and income by investors and consumers become self-fulfilling and lead to a prolonged high economic growth? Explain using the AD-AS model introduced in this course. Please answer within 200 words with appropriate diagrams. (4 marks) (c) From 2021, disruption in supply chain and increasing oil price have brought about high inflation and slower recovery of GDP growth rate from the pandemic for many economies. The recent war in Ukraine and sanctions against Russia is likely to prolong this problem and worsen the situation. Using the AD-AS model you have learned in this course, explain the situation. Also, discuss what kinds of government macroeconomic policy are appropriate to improve the situation, or if there is a dilemma. Please answer within 300 words with appropriate diagrams. (7 marks) END