ECO200 Writing Assignment 1 Fall 2020 As an economist, in addition to being able to analyze a situation, you will need to be able to communicate your ideas to others. In this writing assignment, you will be acting as an economic policy advisor. Your task is to read the scenario below, and do two things: 1) analyze the policy being considered using the analytical tools we have been developing in ECO200, and 2) write a brief, professional memo outlining your policy recommendation. Scenario: Mayor McNeill has just taken over as the mayor of Doronto, a city famous for its lively food-cart industry. All over Doronto there are food carts selling all kinds of different cuisines, and the reputation Doronto has developed as being foody-friendly has been great for tourism. Part of Mayor McNeill's plan for improving Doronto is to promote this food-cart culture, focusing on the business aspect. One of his policy advisors has suggested that one way they could promote this kind of industry in Doronto is to subsidize the wages of food-cart workers: every year when the food carts submit their taxes to the city, the city would subsidize the hourly wages by $1, which would be deducted from the taxes that firm (food cart) would have to pay that year. Mayor McNeill's advisor suggested that this would be popular with the people who work in these firms, and the firm owners, and promote the overall growth of the food-cart industry. Of course, Mayor McNeill is interested in the well-being of these workers, the profitability of the firms, the growth of the industry, and the city's overall finances. Mayor McNeill's office has hired your consulting firm to look into the matter further and provide some guidance as to whether implementing this subsidy would be a good idea overall, and specifically who benefits from this policy. Your firm has done some preliminary research, and discovered the following things: firms in the food cart industry (regardless of what kind of food they are selling) are perfectly competitive, and have the same production technology (cost structure). That is, each firm is essentially identical. There is a large supply of labor in Doronto, willing to work at the (currently) prevailing wage rate of $10/hour - so large, in fact, that firms have no problem finding workers willing to work for $10 per hour (which would continue to be true even if they hired significantly more workers than they currently do). There are no barriers to entry - new food trucks start up all the time. The industry is currently in an equilibrium where firms are earning zero economic profit. Your task is to think about the proposed policy, using the kinds of models we have discussed in ECO200. Notice that this is not a calculation problem - we have not specified the functions you would need in order to perform exact calculations - instead, we want you to be thinking of this more generally. What would happen in this market if we implement this subsidy in the short run? In the long run? Who benefits from this policy? Instructions: Your task contains two parts, an analysis and a cover letter. Analysis: In this section of your writing assignment, you should analyze the above scenario using the tools we have discussed in ECO200. You may assume that your audience has also had ECO200. This means that you should model and describe the situation under consideration using tools we have discussed, and analyze the predictions of that model as it relates to the policy objectives. If you arrive at a conclusion about whether the policy is a good idea or not, you should explain your reasoning. If you cannot determine from what you know, you should explain what you know and what you would have to consider when making the decision to implement the policy or not. You should be clear about what you are considering when making your policy recommendations, and how those factors impact your decision. If you make any additional assumptions (beyond those mentioned above), you should clearly state them and if relevant, address what would happen if those assumptions do not hold. Length: Your analysis part of the writing assignment should be approximately 700 words. Cover Letter: In this section, you are communicating the main results from your analysis to Mayor McNeill in a clear and concise way. This letter should be professional but not technical in nature - it should explain the main ideas of your analysis in a way that can be understood by someone who is not an economist. The purpose of the cover letter is to summarize the information from your analysis - the things you say in your cover letter should be supported in your analysis section, and the main results of your analysis should be included in the cover letter. The cover letter should provide some kind of guidance - this could be to implement or not implement the policy under consideration. Or, if you cannot make a clear recommendation without more information, describe what more you need to know, and how it would help you to make this decision. Length: Your cover letter should be no more than one page (about 250 words), including the formatting. You should include your name and student number in the upper left-hand corner, but format the rest of this part of the assignment as a letter or a memo. We will not require a specific style for the letter, but it should include an appropriate salutation and closing, and be written in a professional tone. Logistics: Submit your assignment online to Quercus. To submit your assignment, follow these instructions o In "Assignments" click the item titled "Writing Assignment 1". o Follow the file naming guidelines below. o Uploaded files should not include special characters in the file name for example, # ! % ?. Do not attach multiple files with the same name. Your assignment will be graded according to a rubric. The rubric is posted in the Writing Assignments folder in the "Files" section of the Quercus webpage. Formatting: To earn full marks, you must do the following: Your assignment must be typed, double-spaced and have a font size of at least 12 points in Times New Roman. Put the word count of your assignment in parentheses at the end. For example, "(X words)" The file you submit must be a PDF document. Files must be named FamilyName_GivenName_ECO200_1 for the first assignment and FamilyName _ GivenName _ECO200_2 for the second assignment, where FamilyName is your family name and GivenName is your given name. Penalties WA1 is due on Dec 7th by midnight. We will accept WA1 late at no penalty through Friday, Dec 11th at midnight. After that point, you will receive a 10 percentage point penalty (5 marks)1 for submitting an assignment after the Dec 11 cutoff, and an additional 10 percentage point penalty assessed every 24 hours. For example: o An assignment submitted at 3:00:00 PM on Dec 8 will have no penalty. o An assignment submitted at 12:00:13 AM (thirteen seconds after midnight) on Dec 12 will receive a 10 percentage point penalty. o An assignment submitted 25 hours late will receive a 20 percentage point penalty. No extensions will be granted under any circumstance (e.g., illness, computer problems, etc.). We will deduct 1 mark (2%) if you fail to show the word count, exceed the word count, submit an unacceptable file format (other than PDF), use an improper file name, use an improper font, etc. Multiple problems will result in multiple deductions. Be aware, there is no cap on the total penalty. 1 Your WA will be graded out of 50 marks, according to a Grading Rubric. The rubric will be posted in a separate document. Assistance: Here are some great resources for getting assistance on the writing assignments. Each college has a writing centre. You can book an appointment at http://www.writing.utoronto.ca/writing-centres/arts-and-science. The teaching approach of these centres is described at http://www.writing.utoronto.ca/writing-centres/learning. For those students whose first language in not English, the English Language Learning program (ELL) at http://www.artsci.utoronto.ca/current/advising/ell is an awesome resource. Check to see what is available this Fall; there will certainly be offerings for you to consider for the F/W semester when you will likely face other writing assignments. Other resources are accessible from this site. More than 60 Advice files on all aspects of academic writing are available from www.writing.utoronto.ca/advice. o Note in particular "How Not to Plagiarize" and other advice on documentation format and methods of integrating sources; these are listed in the section at www.writing.utoronto.ca/advice/using-sources. Writing Tips2 : Use simple, clear language. Avoid metaphors, flowery speech3 or jargon. Particularly in academic writing, your goal is to clearly communicate your ideas. Do not use the passive voice (The box was held by John) when the active voice is an option (John held the box). Keep your sentences short. Make sure your paragraphs are self-contained and coherent: put only one main idea in each paragraph. Avoid too long (more than 1/3 of a page) or too short (one or two sentences only) paragraphs. Make your main point early on, and make sure that everything you write serves to support your main point (even your counter-arguments serve to support your main point). Support each argument with evidence, such as a statistic, example or economic reasoning. Make clear the economic concepts and reasoning on which your argument is based. 2 From Jessie Lamontagne and Andrea Williams. 3 For example: "Since the dawn of time, economists have contemplated . . ."