Microeconomics Assignment 1 PACC6007 In week 2, we covered the principles of demand and supply. Understanding demand and supply allows us to gain insights into how the market for a particular good, service or asset operates due to changes in demand and/or supply. For this assignment, you are presented with the following task:

1. You are firstly required to apply the principles of demand and supply analysis to describe a particular scenario.
2. You are then required to propose a policy solution as to how outcomes in the market of your particular chosen good/service/asset can be improved for the wellbeing of most citizens.

This is a very broad topic. It is one where you can exercise considerable initiative and creativity in applying the economic principles learnt in this course to applied real-world examples. It is also one where we can see the impacts first hand. For instance, you could choose to analyse the Australian housing market. For many people in Australia, buying an apartment/unit/house has become very difficult, due to escalating prices. You would have probably heard about this issue in the media etc. In your essay, you could potentially begin by firstly providing some background to the problem, and explain some reasons as to why real estate prices have risen in recent years. Is it an issue of excess demand? What is causing this excess demand? On the other hand, is an inefficient supply of houses the problem? You could then propose various solutions to fix the problem of escalating real estate prices. Is it better to rectify excess demand or inefficient supply? What would this look like in a demand and supply analysis? Even very recently, there have been proposals put forward to ease the burden of escalating house prices by allowing first home buyers to withdraw funds from their superannuation accounts (this is a similar policy to what was permitted during the Covid-19 outbreak). See: https://www.theguardian.com/australia-news/2022/may/15/how-does-the-coalitions-super-scheme-for-first-home-buyers-work-and-would-it-drive-up-prices For a more in-depth analysis, you can also think about the slope of say the demand curve when analysing the real estate market. Is the demand curve relatively steep (i.e. inelastic). Why? There are many other examples where the principles of demand and supply analysis can be applied. Some other suggestions would include petrol prices (or commodity prices in general e.g. natural gas). See: https://www.theguardian.com/australia-news/2022/may/11/beyond-a-joke-uber-and-taxi-drivers-plead-for-relief-as-petrol-prices-rise-again Again, if you were to choose to apply the principles of demand and supply to rising petrol prices, you could provide some sort of background to the problem as to why petrol prices have risen, and how your policy intervention would result in prices falling etc. Do not feel obliged to analyse a market where prices of a selected good/service/asset are rising. For instance, I recently watched a documentary which was covering how real estate prices have fallen in regional towns in Italy. See: https://www.youtube.com/watch?v=b8F1jp05vsA What policies could be adopted to rectify falling real estate prices? For your essay, you are required to do some research. Use google scholar/newspapers etc. Since you only have between 1000-1500 words, think about how your essay will be structured. A general suggestion would be (again, this is just a guide feel free to be creative!): Introduction:

• Indicate what you are choosing to write about (e.g. rising real estate prices).
• Why is your topic worth studying? (e.g. why are rising real estate prices an issue? Who do rising prices affect? E.g. first home buyers)
• Tell the reader how the essay will be structured

Body:

• Show through a demand and supply analysis what is happening (i.e. real estate prices are rising etc). What is causing the curves to shift?
• Do some research is there data available to show by how much they have risen?
• Then introduce some policies that can rectify the issue of escalating real estate prices.
  • Policy proposal 1 describe the intervention. What affect will it have? Will anyone be negatively affected?
  • Policy proposal 2 describe the intervention. What affect will it have? Will anyone be negatively affected?

Conclusion:

• Provide a summary of the problem, and how your proposals will rectify the issue
• In the conclusion, do not bring in any new information

References:

• Provide an accurate reference list.

• Some general comments/suggestions:

This is an individual assignment based on your own research, interpretation and thinking. Having made that clear, you are permitted to work with friends / class colleagues on searching for literature if you are doing the same topic. This can be more efficient in the early stage for some students rather than trying to do it all yourself. However, the interpretation of this literature and your evaluations from reading it must be your own work. Also, avoid having an identical reference list to your friends as this gets picked up and raises suspicions to further check your work for copying. We understand that if you do the same topic as your friends and you both worked on searching for literature, then you both would share similar literature in your respective reference lists. However, you should also make an effort to include at least some different references to demonstrate that you can do your own searches. This is only a 1000-1500 word essay but you should still take a few days to do it (maybe longer). It cannot be done effectively the day before as this lack of preparation will be evident in your submission (regardless of how confident you think you are). What we mean by taking time with the writing process is to start reading and writing early. Spend several hours trying to do a first draft. You might spread this out over a few days rather than trying to do the first draft in one big go. It is most likely that the first draft will not be of submission quality. But the act of trying to write helps clarify your ideas. After having a break from it for a few days, return to your first draft to reorganise it, possibly adding but just as important cutting sections out. Then read it out aloud to note any inconsistencies or parts that are not clear. Check that the introduction, body and conclusion are an integrated piece of work. At this stage you may still need to consult some more references. Polish it and edit. Double check that your references are accurate.

• Which referencing style should I use?

The University Library has abundant resources to help you with this so refer to them. Here is a good start: http://libguides.newcastle.edu.au/quick-reference/basics For new students, academic referencing requirements and the array of styles can seem overwhelming. There are strange names that can bewilder the novice (e.g. Harvard style, Vancouver, APA 6^th, etc). However, in reality all these different styles simply fall into two main approaches: in-text references (e.g. Harvard style, APA 6^th) or footnotes (e.g. Chicago 17a, AGLC4). For your essay, I prefer the relatively simple in-text style where full details are at the end of the document (i.e. APA 6^th). Put simply, in your work you acknowledge the author or organisational name of the source. For example: Averolia (2017, p. 17) argues that current regulations for banking are inadequate. Then in the reference list at the end you provide full details for this source: (this example is hypothetical) Averolia, R. (2017), Bank robbers in suits, Chapter 4 (pp. 56 -66) in Petersen, B. (ed.) Big profits, Big Greed, Pluto Books: Melbourne. This makes the document more streamlined compared with some of the other referencing styles that use footnotes at the bottom of each page.

• How many references should I use for this essay?

For your essay which is relatively short at 1000-1500 words (excluding the reference list), you should still try and have at least 8 references to demonstrate a considered argument. You probably do not need more than 15. Anything more than 15 would be too much for this short piece of work. Only include in the reference list what you use in the text. Inserting lots of references at the end (maybe to look impressive) but not referring to them in the text will lose marks.

• How do I find information for my topic?

Google (scholar) and Wikipedia - are good places to start with a topic but you need to go beyond the first few listings with a search to do quality work. Locate some useful references for your topic. Next consult the original work (likely by entering this reference into your search engine) and then backtrack and see what references were used for that article. It is like detective work, investigative journalism or archaeology trying to uncover the sources and find more information. Importantly, referring back to the original sources that came up on Google Scholar or Wikipedia gives your research more legitimacy; that is, you are not simply accepting an article on its face value because it happened to be the first listing on Google. Because this essay is on contemporary issues, recent government reports or media articles are good sources of information. You can also use the textbook to reference some economic theories (although keep in mind the textbooks are just reporting on established theories from many other sources over the decades). In other words, the textbook is OK to use as just one of your eight or so references. (An essay that just uses the textbook as its main reference point would likely fail as it would not have enough to discuss or analyse.) Do not refer to lectures or powerpoints as a reference source. Moreover, there is no point using an academic journal as a reference if you dont understand it. Read the articles abstract if it makes sense to you and you think it could be useful then use it; it is does not make sense to you then dont use it. If you find an academic journal article that you can comprehend and it is relevant, then definitely use it.

• How will my essay be marked?

The essay will be marked according to a rubric, which you can locate in the assignments section. Marks for the essay will be split according to the following rubric: The essay will be marked out of 100. Introduction 20 points Body 50 points Conclusion 20 points Essay structure and Reference list 10 points

Attachments:

PACC6007-Assi....docx