College of Business
BEO1105 Economic Principles, Semester 3, 2013-14
ASSIGNMENT
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Worth: 20% of total marks for the unit.
Due date: Submit the assignment to your tutor during your tutorial in the week beginning the 20th of January, 2014. Please note that no late submission will be accepted. In special circumstances, e.g. illness that is supported by a medical certificate, you must apply for special consideration, within three working days from the due date.
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Students must answer both questions.

Question 1 (10 marks)

Using demand and supply analysis, including appropriate diagrams, explain the following:
A new disease destroyed apple plantations.
(a) Explain clearly the effect of this event on the demand and/or supply and on the equilibrium price and quantity in the market:
• for apples
• for oranges (5 marks)


(b) Discuss what happens to the demand and or supply and to the equilibrium price and quantity in the market for housing as population increases and at the same time the government releases more land for housing.
(5 marks)


Question 2 (10 marks)

The government wishes to reduce consumption of alcohol and considers two strategies:

1. an advertising campaign to emphasise the negative health effects of alcohol consumption;

2. imposing a tax on alcohol.

(a) Show and explain the expected effect of each strategy, outlined in (1) and (2), on the demand for and/or the supply of alcohol and on the equilibrium price and quantity.
(5 marks)

(b) Advise what other factors the government should consider, in order to estimate the effect of these two strategies on alcohol consumption and on the government revenue from the tax on alcohol.
(5 marks)
Please read the following, carefully:
• The final submission should show your understanding and application of the relevant concepts.
• Since the assignment forms a part of the final mark for the unit, no assistance will be provided by the staff in relation to answers to the questions. However, if you need any clarifications in regard to the questions, you may contact the lecturer/tutor.
• Your answers must be typed. Graphs may be drawn by hand. You should not need more than 3 pages, including text and diagrams, using line spacing 1. Make sure that the axes and curves in your diagrams are properly labelled.
• Use Times New Roman, size 12, for the text. Number the pages, if applicable.
• Have a cover page including:

? Unit code and title
? Name of the assignment
? Tutorial group
? Tutor’s name
? Student name and ID number
? Due date

• Attach the completed Assessment Declaration form available in the Assessment Information section of the unit website (WebCT/Blackboard), http://ce6.vu.edu.au/.
• Reference List, if applicable. Please use the Harvard System, refer to http://lgdata.s3-website-us-east-1.amazonaws.com/docs/1909/377548/Main_Examples_090812.pdf


Marking Reference

The overall mark will depend on the content and accuracy of the presentation.
The written presentation should address the assignment questions, showing understanding and application of the key concepts covered in the learning program. Be concise and to the point. The following table provides a general reference on marking.