Q1. Using the demand and supply model, explain and illustrate graphically, the statement made in the news article, “why vegetables are so expensive in Australia at the moment”

ASSESSMENT 1A: ARTICLE ANALYSIS – 20TH SEPTEMBER 11PM

Weighting 18% Word limit 1000 words (10% up or down). Total marks 18 Submission Course Website only Extension Maximum 7 days Late Penalty 10% per calendar day Topics Assessed (1a – 2, 3, 4 and 5)

Reference1 UniSA Harvard Style AIMS The purpose of this task is to demonstrate your understanding of the economic concepts and models you have learned in the course in topics 2, 3, 8 and 9 by relating them to a real-world situation. COURSE OBJECTIVES These course objectives are covered by the assignment.

CO1. Describe and utilise the fundamental tools, methods and language of economics to analyse resource allocation issues CO3. Describe the impact of incentives and use economic models to illustrate how agents and economies respond to incentives

CO4. Identify the limitations of the market mechanism and analyse the role of government in affecting markets and decision-making in the general economy

CO5. Apply economic principles and concepts to analyse business cycles and monetary and fiscal policy in an open macroeconomy, and to demonstrate the significance of trade and globalisation. Components Course Objectives Weighting Due date Individual or pairs Details Submission process 1a 1,3,4 18% 20th September Individual 1000 words Gradebook

TASK DESCRIPTION 1. Read the article written by Alyx Gorman “vegetables are so expensive in Australia at the moment” published in The Guardian dated 27th March 2020.

2. Answer the questions that follow the article using economic models where appropriate.

3. Answer each question separately and do not include an introduction and conclusion.

4. Wherever you use ideas from sources to support your arguments make sure you cite them according to UniSA Harvard conventions. 1 Failure to cite properly is evidence of academic misconduct, and will result in marks being deducted.

FRAMEWORK FOR EACH ANSWER 1.

Identify the key issue in the questions provided.

2. Use the appropriate economic model to illustrate the key issues graphically. Fully label the model and clearly indicate where changes occur.

3. Explain the model and discuss the outcome.

4. Outline the assumptions. 5. Provide the list of references used in answering the questions

NEWS ARTICLE vegetables are so expensive in Australia at the moment The Guardian Alyx Gorman Fri 27 Mar 2020 13.16 AEDT https://www.theguardian.com/food/2020/mar/27/ive-never-seen-it-like-this-why-vegetables-areso-expensive-in-australia-at-the-moment Empty fruit and vegetable shelves in an Australian supermarket after panic buying due to the coronavirus outbreak. Photograph: Chris Putnam/REX/Shutterstock. Wholesale prices of some vegetables have risen dramatically but the coronavirus isn’t to blame for everything. $11.50 for a kilogram of broccoli. $8 a bunch for fresh celery. The price of some vegetables in Australia has gone up considerably recently. These price increases have led many people to take to social media, accusing major supermarkets and independent retailers of profiteering and price gouging at a time of crisis.

However, Shaun Lindhe, the communications manager for peak vegetable growers body AusVeg, suggests that the price increases have more to do with another story, one that has fallen from the headlines in recent weeks: the ongoing, devastating droughts and bushfires that ravaged Australia over the summer. “There’s been a reduced supply as a result of drought,” Lindhe says. “There’s also seasonal fluctuations in supply, as production regions transition.”

The reduced supply has coincided with panicked shoppers clearing shelves, driving prices even higher. On 24 March, ACCC chair Rod Sims directly attributed grocery price hikes to “unnecessary panic buying”, saying: “Australia’s supermarkets have experienced unprecedented demand for groceries in recent weeks, both in store and online, which has led to shortages of some products and disruption to delivery services. “In order to meet that demand growers and retailers have been working to try and keep that supply on supermarket shelves,” says Lindhe, “and as a result some of the production costs in terms of labour and transport have gone up.” In January, well before the novel coronavirus crisis hit Australian shores and shifted consumer behaviour, growers warned of a 50% increase in vegetable prices.

Now a supply shortage is coinciding with a spike in demand. A Woolworths spokesperson, meanwhile, says: “Due to pressures throughout the horticultural supply chain caused by drought, unseasonal weather and an unprecedented spike in demand, we’re currently seeing an impact on the availability of some fresh fruit and vegetable lines. This has led to higher wholesale costs for some fruit and vegetable lines across the market.” “The price of vegetables, like many commodities, is set by supply and demand,” says Lindhe. ARTICLE ANALYSIS 1A – QUESTIONS Q1. Using the demand and supply model, explain and illustrate graphically, the statement made in the news article, “why vegetables are so expensive in Australia at the moment” Hint: Make sure you discuss the equilibrating process, and clearly outline the assumptions in discussing the factors causing change in price and quantity. (6 marks) Q2 (a). Assume vegetables are sold in a perfectly competitive market and firms are making zero economic profit. Explain and illustrate graphically, the effect of increase in price on the short run position of a single firm selling vegetables.

(Hint: Make sure your graph includes the firm’s demand curve, marginal revenue curve, marginal cost curve and average total cost curve and also explain the profit maximising position of a firm) (6 marks) Q2 (b). Based on the short run position identified in Q2 (a) explain and illustrate graphically effect of entry/exit on the long run position of the firm. (Hint: your answer should include graphs for both market as well as individual firm.) (4 marks) Your assignment will also be assessed on how effectively you can communicate with the reader, i.e. how well you have presented your arguments and ensured your analysis is logical and consistent.

In addition, 2 marks will be awarded for correct grammar, referencing and formatting. Importantly, make sure you use appropriate diagrams in your analysis.

RUBRIC ECON 1008 Assignment 1 – Part A Rubric Total marks: /18 Question Criteria Needs work F1 Good P1 to P2 Very Good C Excellent D to HD Q1 /6 Identification of the Key issue – based on the article (2 mark) Graph – use of appropriate model (1.5 mark) Explanation of the model and discussion of the outcome (2 marks) Assumptions (0.5 mark) Q2a /6 Explanation of the market along with the profit maximising condition (2 mark) Graph – use of appropriate model (2 mark) Explanation of the model and discussion of the outcome (2 marks) Q2b /4 Graph – use of appropriate model (2 mark) Explanation of the model and discussion of the outcome (2 marks) /2 Writing, formatting and referencing Comments:

ASSESSMENT CRITERIA Judging the quality of submitted material requires some judgment by academic staff.

Rather than a simple formulaic approach, markers combine a number of elements to judge the quality of an assignment. In broad terms, assessment of your assignments will take into account: 1. Relevance of your answer to the question (Did you answer the question?) 2. Did you use a model and graphical representation to analyse the question? 3. Clarity of expression (Is it written well?) 4. Logical planning and sequence (Does the argument make sense?) 5. Did you provide theoretical support for the arguments used? 6. Was the question answered fully or only in part? 7. Where appropriate, were sources properly cited and referenced? 8. Overall presentation, including correct grammar, spelling and punctuation (Is the presentation of professional quality?)

EXTENSION 1.

In the case of requiring an extension for 1a, you need to apply through the extension link provided on the learnonline course site only. 2. Request for extension will not be acceptable via email to course coordinator or tutor. 3. It is mandatory to provide proper documentation for processing your request (medical certificate or a draft of your assignment). 4. Requests for an extension will not be acceptable after 11th September 5 pm. 5. Assignments with approved extensions will have only one additional week for submission. 6. In accordance with the Division of Business guidelines, assignments submitted late without permission from the course coordinator/s will attract a penalty of 10% of the total possible marks for the assignment per day for each day late, or part thereof, after the due date.

ADDITIONAL INFORMATION 1.Question-Answer format is acceptable. 2. Answer each question separately. 3. Make sure to fully label diagrams; and clearly indicate changes you make to graphs. 4. Specify any assumptions you make and use a clear, concise and coherent set of arguments in your discussion/analysis. 5. There is no need to provide actual data/numbers as this is a conceptual exercise. 6. Submit your assignment in a Word file (PDF or other format is not acceptable). 7. There are no resubmissions allowed. GRAPHS 1. Support your discussion with appropriate graphs. 2. Hand-drawn graphs are accepted. 3. You can make use of the snipping tool to attach your hand drawn graphs to your word file.

REFERENCES AND PLAGARISM 1. There is no need for additional references; however, you can draw upon other references (but cite) in support of any arguments you make in your discussion. 2. There is no minimum number of references recommended. 3. You need to provide references, using UniSA referencing guidelines only. 4. You are expected to answer written questions in your own words. In written academic work you must acknowledge the source of your information (including set textbooks) but only those references that are actually used should be cited. You should use the Harvard referencing system. (see: https://lo.unisa.edu.au/course/view.php?id=3839 )

ACADEMIC INTEGRITY The university is committed to academic integrity and has policies and procedures in place to ensure academic integrity. More information about Academic integrity (AI) can be found in the Assessment policies and procedures manual at: http://www.unisa.edu.au/policies/manual/ Or visit the AI Module website https://lo.unisa.edu.au/mod/book/view.php?id=252142 which explains in detail how students can work with integrity at the University. ANY WORK THAT HAS BEEN JUDGED TO CONTAIN PLAGIARISM WILL SCORE ZERO MARKS; SERIOUS ACADEMIC MISCONDUCT MAY RESULT IN SUSPENSION FROM THE UNIVERSITY.

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