ECON10004: Introductory Microeconomics 微观经济学 代写
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ECON10004: Introductory Microeconomics 微观经济学 代写
ECON10004: Introductory Microeconomics
Semester 2, 2017 7
Assignment 1 (10%)
Due date: 2pm on Wednes day 6 September 2017
Instructions:
Students must read these instructions carefully before working on the assignment.
• This assessment exercise will account for 10 per cent of your final grade in the
subject. It is an individual assignment.
• Assignments must be submitted online via the LMS subject site for Introductory
Microeconomics. A link to submit the assignment will be made available close to
the deadline.
• Students who anticipate difficulties of submitting the assignment on time must
apply for an extension through the faculty:
http://fbe.unimelb.edu.au/students/bcom/current-students/assessment
• Late assignments where approval has not been granted will be penalised at a rate
of 10% of the total mark per day.
• Please remember to keep a copy of your assignment.
• Limit: 1000 words (Word limit does not include diagrams).
• For further instructions see the notes on ‘Assessment details’ in the Subject Guide.
Please also read the section “j” on plagiarism and draw your attention to the nature
and consequences of plagiarism.
Professor Phil McCalman
Department of Economics
The University of Melbourne
Question: Background Information
Read the following article and answer the questions below.
Berkeley has America’s first soda tax, but stores are barely raising drink prices
Vox August 20, 2015
Soda taxes are a perennial policy suggestion in response to America's rising obesity rate.
If soda costs more, the thinking goes, shoppers will buy less of it and consume fewer
calories.
With this theory in mind, Berkeley, California, passed the country's first soda tax last
November. New research, however, shows that the 1-cent-per-ounce tax isn't necessarily
working as planned: Soda distributors are not passing most of the costs onto consumers.
Economists John Cawley and David Frisvold show in a new National Bureau of Economics
Research working paper that soda distributors have only passed on about 21.7 percent
of Berkeley's new tax to consumers. They have, in other words, only raised soda prices
by about a fifth of the new tax's price.
"These results imply that the Berkeley soda tax, because it is passed through to
ers to a lesser extent than anticipated, will result in less of a reduction in
consumption, and thus less health improvement, than anticipated," the researchers write.
Cawley and Frisvold also point out that their research on Berkeley's tax is at odds with
other studies that looked at national soda taxes. Why would Berkeley be different? The
researchers have a few theories, one being that retailers don't want to push shoppers to
nearby stores outside of Berkeley, where they can still buy cheaper, tax-free soda.
Previous research has found cross-border shopping in response to food taxes, even at the
state level. In the U.S., the mean distance traveled to shop for groceries is 5.2 miles; even
for households with income below $30,000 the average distance traveled to grocery shop
is 4.8 miles. In light of this, retailers may not try to shift the tax to consumers, fearing loss
of sales. If true, taxes passed at the city level may be less effective at changing prices and
consumption than taxes at higher levels of government that are harder to avoid through
cross-border shopping.
Questions
1) Explain the rationale behind the soda tax. Is it revenue motivated or market failure
motivated? [2 points]
2) If the tax incidence on the consumer is 20% what does this tell you about the relative
elasticity of demand and supply? Does this match your expectation? [2 points]
3) Graphically analyze the soda tax and identify the welfare outcomes. In particular,
discuss the change in welfare for each group along with the deadweight loss. [8 points]
4) Subsequent research shows that there was a 10% reduction in the consumption of
soda in Berkeley after the tax. Under what conditions on price is demand unit elastic?
How realistic is this price? Does this imply that demand is more likely to be elastic or
inelastic? What can we say about the elasticity of supply? [4 points]
5) The nearby cities of Oakland and San Francisco introduced a similar soda two years
after Berkeley. How is the introduction of these taxes likely to change the tax incidence
in Berkeley? [4 points]
Extra information on doing assignment 1
Some general hints
The objective in this assignment is to answer questions 1-5. The most important piece of
advice is to do what the questions are asking. For example, some questions ask you to
apply the demand/supply model to answer questions about changes in market outcomes.
This means that to answer these questions you should explicitly use the concepts of
demand and supply, and equilibrium price and quantity traded.
You don’t need to state definitions of any of the concepts such as demand and supply, or
equilibrium. Assume that your tutor knows what these concepts mean. Instead , the
assignment is trying to test your knowledge of the concepts by how you apply them in
answering the questions.
To complete the assignment the only reading you should need to do is lecture notes and
the relevant sections of the textbook, and the excerpts from the article included with the
questions.
Marking criteria
ECON10004: Introductory Microeconomics 微观经济学 代写
Three main factors will be considered in marking your assignment:
a) Knowledge of economic concepts – For example: Has the answer used e appropriate
economic concepts? Does the answer show a thorough understanding of those concepts?
b) Quality of analysis and application of economic concepts – For example: Is there a
logical and thorough supporting argument or description of how conclusions have been
drawn? Have economic concepts been applied in an effective manner in the particular
application? Are assumptions clearly described? Is an understanding shown of any
relevant qualifications to the conclusion?
c) Presentation – For example: Are the writing style and organisation of material such
that the main ideas and arguments can be understood? Are diagrams presented clearly
and effectively integrated with text?
ECON10004: Introductory Microeconomics 微观经济学 代写
