1. ECON1025 - Semester 2 2021
Prices and Markets
Assessment Guidelines
Professor Robert Hoffmann
Assessment Task 1: Online Quiz (10%)
Assessment Task 2: Microeconomic Analysis Report (40%)
Assessment Task 3: Microeconomic Case Analyses (50%)
Assessment Task 1: Online Quiz (10%)
This is a multiple choice quiz worth 10 marks. It is based on all
the material from weeks 1-3
(lectures and tutorials). You must access and complete it on
Canvas. The quiz will consist of 10
questions and you have 60 minutes to complete it. All questions
are equally weighted. There is no
negative marking (where a wrong answer loses you marks). You
will get one attempt at this quiz.
You will not be able to to go back to a previous question once
you submitted your answer to it. The
below quiz and the weekly tutorial quizzes provide some
guidance as to what the assessment task
1 will look like in terms of format and type of questions.
Sample Quiz
1. Based on the table below, using the midpoint formula, what
is the income elasticity of

2. demand for good X?
-3.5
-0.29
0.29
3.5
2. Which of the following statements is not correct, based on
the figure below?
When the price is $10, quantity supplied equals quantity
demanded.
When the price is $6, there is a surplus of 8 units
When the price is $12, there is a surplus of 4 units.
When the price is $16, quantity supplied exceeds quantity
demanded by 12 units.
3. Which of the following phrases best captures the notion of
efficiency?
Minimum Waste
Absolute Fairness
Equal Distribution
Equitable Outcome
Income Q of X Purchased
$30,000 2
$40,000 6

3. 4. Suppose Jim and Tom can both produce baseball bats. If
Jim’s opportunity cost of
producing baseball bats is lower than Tom’s opportunity cost of
producing baseball bats,
then
Tom must have an absolute advantage in the production of
baseball bats.
Jim must have an absolute advantage in the production of
baseball bats.
Tom has a comparative advantage in the production of baseball
bats.
Jim has a comparative advantage in the production of baseball
bats.
5. The cross-price elasticity of demand between Kit Kat and
Mars is negative. Based on this
information alone, we can conclude the two products are
substitutes
True
False
6. Economics is primarily the study of
the state, nation, government, and politics and policies of
governments
the problems related to the existence and evolution of society
how agents choose to allocate scarce resources and how these
choices affect society
the mental functions and behaviour of individuals and groups
7. Which of the following statements correctly highlights the
difference between
microeconomics and macroeconomics?

4. Microeconomics deals with a small part of the economy,
whereas macroeconomics deals with
aggregate economic performance.
Microeconomics describes what economic agents actually do,
whereas macroeconomics
describes what economic agents ought to do.
Microeconomics primarily deals with positive analysis,
whereas macroeconomics primarily deals
with normative analysis.
Microeconomics is descriptive, whereas macroeconomics is
advisory.
8. Which of the following best describes equilibrium?
A stable situation where no economic agent would benefit by
changing his or her behaviour
A situation where economic agents do not optimise as they do
not have perfect information
A situation where only one individual or firm makes an optimal
decision
A situation where the government intervenes to allocate
resources
9. Empiricism is analysis that uses ________ to test theories.
illustrations
philosophy
data
value judgments
10. Which of the following is an example of a positive
economic statement?
An increase in income causes an increase in savings.
Eliminating poverty is more important than reducing inflation.
Economics is the most useful social science.

5. The government should ideally work as a welfare state.
Answers: 1D;2B;3A;4D;5FALSE;6C;7A;8A;9C;10A.
Assessment Task 2: Microeconomic Report (40%)
Using models and theories of either (1) the market or (2) market
failure (i.e. only material from lectures 2 to
6), perform a microeconomic analysis of one specific
appropriate issue or phenomenon of your choice.
Clearly explain your chosen question, method and conclusions.
Assessments task 2 has limit of 1500 words to be submitted on
Canvas. Your submissions should be word
processed (i.e. produced using a program such as Microsoft
Word) and contain word count and bibliography.
There are no specific requirements for font size or typeface,
spacing or margins other than that your
document should be easy to read. You also do not need an
executive summary or other elements not
specifically mentioned here. For every 10% word count
(counting everything but the bibliography) over the
limit you will lose 10% of the assignment marks until it reaches
zero. There is no discretionary margin above
this limit. There is no minimum but you are advised to use all
the words allowed to allow for a more
developed and detailed analysis.
Your submission will receive an automatic Turnitin similarity
score that should not exceed 25%. You should
check this score using the tool on Canvas before submitting.
Exceeding this limit raises the risk of your
submission being subject to an academic integrity process. As
per University regulations late assignments

6. receive a 10% penalty per day until the mark reaches zero.
Marks will be given according to the rubrics on
Canvas. You must attach a completed coversheet with your
submission (template appended below).
Your task is to conduct microeconomic analysis of an issue that
you select yourself, just as businesspeople
and policymakers do. You will be assessed on what you learnt
in the course by correctly choosing and
applying definitions, methods and theories from lectures and
tutorials 2-6. As this is a microeconomics
assignment you should not write a general or journalistic report
or use concepts from other courses not
discussed in this course, including macroeconomics.
Clearly structure your report (depending on topic), for instance
using numbered sections for each of the parts
of the task, e.g. introduction, concepts, model, analysis and
conclusion. Introduction and conclusion will
normally be shorter. The length of individual sections could
reflect their weights in the grading shown in the
rubric below. Sample topics, questions relating to them and
appropriate methods/analytical tools are given in
Assessment 2 Steps
1 Choose
topic and
question
Look at the business and economics news for ideas for an
appropriate issue. It needs
to fit the purpose of microeconomics (lecture 1) - a topical,
important example of
resource allocation with questions you can answer by applying
microeconomic

7. methods from the lectures relevant to the assignment. State the
question, why it’s
interesting and economically significant. Present facts or
descriptive data to illustrate.
The issue needs to be a specific (topical or historical) ca se. This
means you will discuss
a specific market for a product, service or factor of production
in a specific context
rather than a general economic issue or problem. Also make
sure your topic does not
fall within macroeconomics, which is not covered in this course.
2 Select your
methods
(concepts
and models)
Select the right method (i.e. microeconomic model, theory or
tool from lectures and
tutorials 2-6 to answer your question.
3 Explain your
concepts
and models
Explain your method. Assume your reader needs to be explained
every concept and
model needed to follow your analysis, as if you are teaching
your reader these.
4 Analyse
your topic
Apply the method to your issue. Report the different steps of
your analysis and your
findings. Typical analysis applies the tools from the relevant

8. lectures to your specific
case. Use relevant diagrams or models as they answer the
question better than only
words. If your chosen method comes with such models (e.g.
diagrams or graphs), not
using these in your assignment will result in a significant loss
in marks.
5 Conclude Your conclusion will directly answer the question
and maybe look at the big picture -
the significance and limitations of your work. Provide answer to
questions like: What
have we learnt from your analysis for business or government
policy? So what?
the table below. They are taken from lectures and the tutorial
questions you tackled in class. Please do
not use these or indeed any examples from classes as choosing
an original topic and analytic tool by
yourself is part of the assessment. These and other cases
discussed in lectures and tutorials give you an
idea of how to complete this assignment.
You are required to send your tutor a short email with a short
summary your chosen topic and questions
(please do not send full drafts) for approval at least two weeks
before the deadline. You must append a copy
your tutor’s approval email to your submission. Failure to do so
will result in a grade deduction of 5%. It will
be your responsibility to ensure you completed your assessment
in good time. Managing this project and
your time will be critical for your success.
In addition to this document, guidance for assignment 2 is

9. available from: (1) a video that contains important
guidance on report writing in economics, (2) a tutorial devoted
to the assignments, (3) the email exchange
with your tutor and (4) the weekly consultation hours with the
course coordinator. Also, examples of the kind
of analysis you are required to do is contained in the relevant
lectures (see table below). Note that we do not
provide a template or model answer. The reason is twofold: Part
of the assignment is to develop your
independent thinking and research. Providing a model answer
encourages a “painting-by-numbers”
approach that is inappropriate for a university education and
will not make you an independent thinker, and
will not sufficiently prepare you for work life where no
templates exist. Also, there is considerable scope to
tailor your assignment (within the requirements above) based on
your own style, chosen topic and method.
Sample Assessment 2 Topics from Lectures and Tutorials (DO
NOT USE - FOR ILLUSTRATION ONLY)
Topic Question Potential Methods
(concepts and
models)
Lecture 3.2.3.
Coffee Prices
What explains the rise in world coffee prices in 2011?
Comparative statics
Tutorial 3
1b. Building Ban
Should Bangalore introduce a ban on building new apartments
to

10. safeguard sustainable urban development? What is the effect on
apartment prices when there is a rise in the city’s population?
Comparative statics,
elasticity, market
intervention
Tutorial 3
1d. Mad Cow
Disease
During the 1993 'mad cow disease" or BSE outbreak in the UK,
evidence
emerges regarding the dangers of eating beef from infected
animals.
Which markets are affected, and what are the effects?
Comparative statics,
elasticity, market
intervention
Tutorial 4
1. Rent Controls
Analyse rent controls in the Melbourne residential rentals
market using an
appropriate diagram. Who benefits and who loses out? What is
the effect
on total surplus? How is the policy affected by demand and
supply
elasticity?
Comparative statics,
elasticity, market
intervention

11. Tutorial 4
3. Alcohol Excise
Duty
Australia has a reputation as a hard-drinking culture yet there
has been a
steady decline in alcohol consumption over the past three
decades.
Government is considering reductions to its relatively high
taxes on
alcoholic drinks. Which markets are affected, and what are the
effects? Is
this policy appropriate?
Comparative statics,
elasticity, market
intervention, market
failure
Tutorial 5.1.
Hosting F1
Should Victorian taxpayers should pay $60 million annually to
host the F1
Australian Grand Prix? Examine the pros and cons.
Comparative statics,
market failure
Assessment 2 Cover Sheet
Prices and Markets
Student Name
Student ID

12. Tutor/Local Lecturer
Date
Please tick all the applicable boxes below. Note that failing to
comply with any of the requirements
below may results in deductions from your grade for this
assignment.
I have read and followed the guidelines for this assignment,
watched the assignment video and
took the assignment guidance quiz. ☐
I have discussed my topic with my local lecturer/tutor and I
have appended any email
correspondence approving my chosen topic. ☐
The topic I have chosen is my own original topic and was not
discussed in lectures or tutorials. ☐
The topic I chose is not macroeconomics but microeconomics
and is appropriate for analysis
using the tools introduced in those lectures of this course
relevant to this assignment. ☐
My work contains both explanation and use (in analysis) of
relevant microeconomic models. ☐
The tools I have used to analyse the topic are exclusively from
relevant lectures of this course,
i.e. the market, market failure (lectures 2-6). ☐
The word count does not exceed 1500 words (excluding
bibliography, title page and text in
diagrams). I understand there is no discretionary margin
allowed above this number and that
there is no minimum allowed number of words.
☐
The work is my own and all sources I used to inform me are
referenced and appear in the

13. bibliography. ☐
I have checked the Turnitin score for my work and it is
acceptable (i.e. <25%). ☐
I have submitted this work by the submission deadline. ☐
I have checked that I have uploaded the correct file and the
correct version of this file. ☐
Marking Rubrics for Assessment 2 (total: 40 marks)
Criterion HD DD CR PA NN
Choice of an
appropriate, original
specific topic
amenable to
microeconomic
analysis and
formulation of an
appropriate question
about it (8/40 marks).
Topic and
question are
very original
and
appropriate
Topic and
question are
quite original
and
appropriate
Topic and
question are
somewhat

14. original and/or
appropriate
Topic and/or
question are
not very
original and/or
appropriate
Topic and/or
question are
not at all
original and/or
appropriate
Selection of relevant
course models and
concepts from the
course syllabus to
analyse the topic
(12/40 marks).
Selected
course
models and
concepts are
very relevant
Selected
course
models and
concepts are
mostly
relevant
Selected

15. course
models and
concepts are
somewhat
relevant
Selected
course
models and
concepts are
not very
relevant
Selected
course
models and
concepts are
not at all
relevant
Correct explanation of
chosen course models
and concepts in
sufficient detail (4/40
marks).
Chosen
course
models and
concepts are
explained
entirely
correctly in
sufficient
detail

16. Chosen
course
models and
concepts are
explained
mostly
correctly in
resonable
detail
Chosen
course
models and
concepts are
explained
correctly to an
extent in
adequate
detail
Chosen
course
models and
concepts are
not explained
correctly and/
or in modest
detail
Chosen
course
models and
concepts are
not explained
correctly at all
and/or in

17. lacking detail
Correct and detailed
analysis, i.e.
application of relevant
course models and
concepts to analyse
the topic (12/40
marks).
Course
models and
concepts are
used in
analysis
entirely
correctly and
in detail
Course
models and
concepts are
used in
analysis
mostly
correctly and
in reasonable
detail
Course
models and
concepts are
used in
analysis
somewhat
correctly and/

18. or in
adequate
detail
Course
models and
concepts are
not used in
analysis
correctly and/
or in modest
detail
Course
models and
concepts are
not at all used
in analysis
correctly and/
or in lacking
detail
Drawing correct and
relevant conclusions
from analysis for
economic and/or
business policy (4/40
marks).
Conclusions
drawn from
analysis are
entirely
correct and
relevant

19. Conclusions
drawn from
analysis are
mostly correct
and relevant
Conclusions
drawn from
analysis are
somewhat
correct and
relevant
Conclusions
drawn from
analysis are
not correct
and relevant
Conclusions
drawn from
analysis are
not at all
correct and
relevant
Assessment Task 3: Case Analyses
The assessment is worth 50 marks and will be delivered as a
question sheet on Canvas exactly two weeks
before the submission deadline. Your submission will receive an
automatic Turnitin similarity score that
should not exceed 25%. You should check this score using the
tool on Canvas before submitting. Exceeding
this limit raises the risk of your submission being subject to an

20. academic integrity process. As per University
regulations late assignments receive a 10% penalty per day until
the mark reaches zero. Marks will be given
according to the rubrics on Canvas. You must attach a
completed coversheet with your submission (template
appended below). For the formatting requirements follow the
advice given for assessment task 2 above.
Your submission should be a word-processed document not
exceeding 2000 words. Any diagrams that you
wish to use can be inserted into this document in any way you
like, i.e. created in the word-processing
software itself, or inserted as a photograph of a pencil drawing
or from another software. Label your figures
and tables including numbers and refer to them in the text by
their numbers. Your submission will
automatically receive include a Turnitin similarity score. You
should not exceed 25%. You may check your
score using the Turnitin checking tool on Canvas. Please also
add a word count. For every 10% word count
(not counting bibliography) over the limit you will lose 10% of
the assignment marks until it reaches zero.
There is no discretionary margin above this limit. There is no
minimum but you are advised to use all the
words allowed to allow for a more developed and detailed
analysis.
The task will be essay-style case analysis. The question paper
will contain details of 5 economic
phenomena. 4 of which you analyse in separate answers. Each
of the cases will ask you to use one of the
analysis tools of this course. As a general guide, your answer
should include the steps that were explained
for assessment 2 except for step 3: You will not be expected to
explain the concepts and model that you are
using. Details of the analysis tools of this course to be used in

21. this assessment are shown below.
The marking rubrics are shown below. You will be assessed
based on the sophistication, breadth and depth
of your analysis (e.g. how many factors do you take into
consideration) as well as on correctness of the
analysis and appropriateness of your conclusions.
Note that your answer should be written such that a reader who
is versed in economics can assess your
understanding in every step of your argument. While you do not
need to explain or define theoretical
concepts or methods, you will need to explain why and how
these apply, and how they are used in your
answer. It is not enough to say “concept X applies to issue Y”,
you need to demonstrate that it does and how
it does, and what the implications are.
As an example consider the two answers in the table. Nothing is
wrong in either answer but in the left
column we see an answer in the incorrect format. The first
paragraph simply lists and defines concepts. The
Analytic
tool
Components Examples from Class
Market
Analysis
Comparative statics, own-price, cross price and
income elasticity, market intervention.
Coffee Prices (lecture 3.2.3.); housing
subsidies and minimum wages

22. (lecture 4); rent control (tutorial 4).
Market
Failure
Assumptions of the market model, types of market
failure, government intervention and government
failure types.
Formula 1, casinos, chewing gum,
ERP, DVD piracy (tutorial 5); online
free speech, helmet/seatbelt
regulation (tutorial 6).
Market
Structure
Structure-conduct performance paradigm, market
structure characteristics and types (perfect and
monopolistic competition, oligopoly and monopoly),
market power debate, government monopoly policy.
Container sea freight industry (tutorial
7); Google (tutorial 9).
Game
Theory
Rules of the game, payoff matrices, Nash
equilibrium analysis.
Coordination, the Sydney game,
prisoner’s dilemma (lecture 10);
chicken market collusion, Nash
equilibrium (tutorial 10).

23. Optimal
Boundary
of the Firm
Horizontal and vertical integration, diversification,
production economies, transaction cost economies,
make-or-buy decision.
Starbucks (Lecture 11.3.1.- 11.3.2.).
second paragraph contains no explanation why the conclusion
(SP is a monopoly) follows from the
definition. It also doesn’t support the implication (higher price,
lower output) or discuss it critically. In contrast,
the correct style in the right column does not have the definition
but tells the reader why, and in what sense,
SP is a monopoly. It also states why this might be a bad thing in
theory, yet offers an alternative view.
The next pages contains the marking rubric and sample question
papers that will show you the format of the
paper, style and scope of questions and what we look for in your
answers.
QUESTION 3 (see below)
Answer 1 (incorrect style) Answer 2 (correct style)
Monopoly is defined as the market structure
where there is one firm in the market with 100%
market share and compete barriers to entry.
Market structure refers to the competitive
environment in which the firms operate and is
made up of four characteristics: the number of
firms, their size (relative to the market), the

24. existence of entry barriers which make entry by
potential competitors difficult, and finally product
differentiation where different firms’ products are
seen as distinct in the eyes of consumers.
SP Group is therefore a monopoly and that is bad
because monopoly charges a higher price and
produces less output than a perfectly competitive
industry.
The SP Group is a monopoly because it is the only
electric grid operator in Singapore’s domestic
market. Its delivery network has a high fixed cost
and therefore complete entry barriers: Given
market demand, it is too expensive for any
competitor to invest in a power distribution
n etwo rk. Also ele ctr icity is a pe rfe ctly
homogeneous product and a potential competitor
cannot differentiate themselves by producing a
different type of electricity.
SP being a monopoly is significant because its
market structure, the competitive environment, is
highly concentrated (CR1=100%). SP’s conduct (high
costs and price) and performance (economic profit)
may be poor as it is not competing with actual or
potential rival operators. Government may consider
regulating SP’s price. Then again there are reasons
why, in power markets, large firms may have
efficiency advantages such as …
Marking Rubrics for Assessment 3 (total: 50 marks)

25. Criterion HD DD CR PA NN
Translating the case
study topic into a
question or questions
amenable to
microeconomic
analysis
microeconomic
question (5/50 marks).
Topic and
question are
very original
and
appropriate
Topic and
question are
quite original
and
appropriate
Topic and
question are
somewhat
original and/or
appropriate
Topic and/or
question are
not very
original and/or
appropriate
Topic and/or
question are

26. not at all
original and/or
appropriate
Selection of relevant
course models and
concepts from the
course syllabus to
analyse the topic
(10/50 marks).
Selected
course
models and
concepts are
very relevant
Selected
course
models and
concepts are
mostly
relevant
Selected
course
models and
concepts are
somewhat
relevant
Selected
course
models and
concepts are
not very

27. relevant
Selected
course
models and
concepts are
not at all
relevant
Correct and detailed
analysis, i.e. in-depth
application of relevant
course models and
concepts to analyse
the topic (25/50
marks).
Course
models and
concepts are
used in
analysis
entirely
correctly and
in detail
Course
models and
concepts are
used in
analysis
mostly
correctly and
in reasonable
detail

28. Course
models and
concepts are
used in
analysis
somewhat
correctly and/
or in
adequate
detail
Course
models and
concepts are
not used in
analysis
correctly and/
or in modest
detail
Course
models and
concepts are
not at all used
in analysis
correctly and/
or in lacking
detail
Drawing correct and
relevant conclusions
from analysis for
economic and/or
business policy (10/50
marks).

29. Conclusions
drawn from
analysis are
entirely
correct and
relevant
Conclusions
drawn from
analysis are
mostly correct
and relevant
Conclusions
drawn from
analysis are
somewhat
correct and
relevant
Conclusions
drawn from
analysis are
not correct
and relevant
Conclusions
drawn from
analysis are
not at all
correct and
relevant
SAMPLE QUESTION PAPER

30. Answer any FOUR of the following questions. Each question is
worth a total of 12.5
marks. If more than four questions are answered, marks will be
awarded for the first
four answers only.
QUESTION 1
Coffee is now the second most traded commodity in the world
after crude oil. Not only has
demand for various coffee products risen sharply in Western
countries in recent years,
increasingly there is also greater taste for coffee drinks in
developing countries such as
China and India. In addition, by-products of coffee beans have
become popular such as
coffee leaves which can be used to brew a tea with known
health benefits. However, as a
natural produce, coffee plants are subject to weather conditions.
Recently major producers
such as Brazil have been plagued by droughts. Using the
demand-supply model, explain the
likely effects of these phenomena in the coffee bean market.
How can a market analyst use
this information to her advantage?
QUESTION 2
The internet and online social media in particular are giving
people unprecedented ability to
express their views and share information with others. On the
other hand the truth of what
people say online and the sheer volume of information are hard
for most people to handle. In
Germany the government has introduced the Net Enforcement
Law which prohibits certain
kinds of online speech (e.g. incitement to hatred). Social media

31. firms have 24 hours to check
and remove suspect posts reported by users or face huge fines.
Use the theories of market
failure and government intervention to explain the reasons for
Germany’s new law. Critically
discuss potential problems with this intervention.
QUESTION 3
Singapore Power (SP) is the only operator in the domestic
electricity market in Singapore.
Electricity distribution generally is associated with extremely
high economies of scale
because of the infrastructure (a nationwide power grid) needed
to deliver power to individual
households. Using the theory and models of market structure,
examine this firm. Should
government be worried about any aspect of how a firm under
this market structure will
perform? What should government do to address such worries?
QUESTION 4
Starbucks is mostly known to be a retailer of coffee drinks that
are brewed in-house using
coffee beans and other equipment sourced in the market.
Starbucks is now considering
vertical and horizontal integration beyond coffee drinks retail.
Using the theory of the optimal
boundary of the firm, discuss the make-or-buy decision as well
as the scope for horizontal
integration and diversification of Starbucks. What stages of the
vertical chain should it
consider conducting in-house? What other horizontal markets
may it integrate into and why?
QUESTION 5
In Singapore, 13 fresh chicken suppliers together accounting for

32. 90% of market share have
received a record $27 million fine for operating as a cartel,
fixing prices at a high level and
restricting output. To achieve this representatives of the firms
repeatedly met at at the
Poultry Merchants' Association. Analyse the interaction
between the firms using game
theory. Simplify your model to only 2 players representing the
different firms in this industry.
Present a payoff matrix to model the situation and analyse it for
Nash equilibrium. Which is
the best outcome for each firm? Which is the best outcome for
society as a whole? Why did
government invest in the costly investigation and prosecution of
these companies?
SAMPLE QUESTION PAPER
Answer any FOUR of the following questions. Each question is
worth a total of 12.5
marks. If more than four questions are answered, marks will be
awarded for the first
four answers only.
QUESTION 1
During the novel coronavirus (COVID-19) pandemic, people of
all incomes from poor to rich
are stocking up on different types of product they regard as
necessary. Suppliers cannot
increase their output quickly enough. Singapore government is
concerned about profiteering
and affordability in the markets concerned and is considering
intervening. Using the
demand-supply model, explain these phenomena in one or two

33. markets of your choice.
Advise which market interventions, if any, government should
conduct in these markets.
QUESTION 2
Watching movies with particular kinds of content (e.g. violence,
coarse language, crime,
sexual references) may affect moviegoers in negative ways that
concern government
policymakers across the world. Use the theories of market
failure and government
intervention to explain the reasons for this concern. Identify
different suitable …