Microeconomics 200/500: Essay

The setting:
Curtin University, along with a number of other universities and public bodies, has banned the sale of tobacco products and smoking on its campuses.
In the analyses below, when drawing your diagrams assume that students can choose among only two products on campus, namely tobacco and food. Assume each student has a weekly allowance of $100, all of which is spent on campus, the price of a unit of food is $1 and remains at $1 in the absence of a policy initiative, the price of a unit of tobacco is $1 in the absence of a policy initiative (see below). Please ignore all externalities when answering this assignment. When drawing diagrams, always include a discussion of what the diagram means, and of crucial elements of the diagram.
Your tasks:
a) Use an indifference curve-budget line analysis to depict the situations, prior to the ban on smoking, of a student who smoked on campus, and of a student who did not smoke. (2 marks)
b) Use an indifference curve-budget line analysis to depict the situations, after the ban on smoking, of a student who initially smoked on campus, and of a student who did not smoke. (3 marks)
c) Use you consumer theory to assess how much worse off, if at all, each student is after the ban. (3 marks)
d) Consider at least three (3) alternative policies that Curtin University could have implemented that might have achieved the same objective (reduce smoking levels). Evaluate these using your microeconomic theory. (e.g., public relations campaign about harmful effects of tobacco aimed at changing the shape of the ICs; increase price of tobacco; reduce the price of food). (6 marks)
e) Referencing. (1 mark)

Additional Information:
1. Deadline: Thursday 09/10/2013, 12noon.
2. Upload your assignment through Turnitin. This link will be available under the ‘Assessment’ tab on Blackboard. You can only upload once, so ensure you upload the correct file.
3. Ensure that you put your Name, Student ID, Tutors Name and Tutorial Time on the cover/front Page of the Assignment/Essay.
4. Submission of a hard copy is not required.
5. The Marks for the assignment are allocated for your answers to parts (a) through to part (e), as per the instructions. However, a brief (a couple of sentences) introduction and concluding statement, will add to the professionalism of your submission.
6. Where you use graphs, ensure that you label them clearly and that they are appropriately explained.