Principles of Economics Assignment

ECON1020 – PRINCIPLES OF ECONOMICS 1
INDIVIDUAL ASSIGNMENT
Total Marks 35 | Weighting 30%
IMPORTANT INFORMATION: READ BEFORE YOU START
SUBMISSION

The submission link is available under the ‘Assessment Tasks’ tab on iLearn.
• No extensions will be granted except for the cases where an application for Special
Consideration has been approved. For further details, see the University’s Special
Consideration policy.
• Late submission will incur a penalty of 10% per day of total available marks.
• New submissions will not be accepted beyond 72 hours past the submission
deadline.
• Re-submissions are allowed until the deadline. After the deadline, no re-submissions
are allowed under any circumstances.
• Note: you will not be able to see your Turnitin originality report until the deadline
has passed.
DOCUMENT PREPARATION
• Prepare your answers in one document using word processing software (e.g.
Microsoft Word).
• Written answers should be typed using a standard font (e.g. Times New Roman,
Calibri, Arial). Hand-written answers (except for the diagram in Question 9) will not
be marked.
• Do not add a cover page to your assignment or repeat the text of the questions in
your submissions (simply answer questions in order, denoting Q1, Q2, Q3… etc.).
• Written answers should not exceed the maximum word limit stated in each question.
Any words written exceeding the limit will not be assessed. Note that this is a
maximum word limit, you may answer the question in fewer words if desired.
• Diagrams can be hand-drawn or electronically drawn and must be inserted into your
answer document.
o One way to insert a hand-drawn diagram is to take a photo of the diagram
hand-drawn on paper, send it to your computer via email, copy it into your
document, and then crop as required.
o Applications for electronically drawn economic models include Microsoft
Word, Microsoft OneNote, and Google Drawings (see these YouTube
tutorials for tips on how to get started).
• Save your answer document as .doc, .docx or .pdf format. The extension .pages will
not be displayed in Turnitin which means that it cannot be assessed.
MACQUARIE
BUSINESS SCHOOL
Department of Economics
UNACCEPTABLE ACADEMIC ACTIVITIES
• Recall “what is okay” and “what is not okay” from the Academic Integrity Module.
Unacceptable academic activities will initiate the student disciplinary procedure and
result in zero marks. They include, but are not limited to, contract cheating,
collusion, plagiarism, and self-plagiarism. Details about academic integrity can
found here: MQ academic honesty policy.
• This is an individual assignment. Writing answers together is not authorised hence
is categorised as collusion. You may discuss with other students at the preparatory
stage. However, the final version of the assignment should be written in your own
words.
• Note that Turnitin will compare your submission against others’ as well as internet
sources. The Turnitin originality report will be made available to students after the
deadline.
MARKING
• A detailed rubric is provided on the last page.
• Given the size of the cohort, the entire marking process can take up to three to four
weeks. There will be an announcement on iLearn when the marks are released.
MACQUARIE
BUSINESS SCHOOL
Department of Economics
CLIMATE CHANGE AND THE SWITCH TO CLEAN ENERGY
PART A
Carbon dioxide levels in the atmosphere today are higher than at any point in at least the
past 800,000 years. The risks associated with the resultant climatic change have been well
documented.
We can model the problem of climate change as a game between two groups: developing
nations and developed nations. In this game, each group can choose from one of two
possible climate strategies:
• Abate: governments enact policies to reduce carbon emissions, for example, by
subsidising clean energies or taxing fossil fuels.
• No change: governments fail to enact policies to reduce carbon emissions. Businesses
and individuals are free to pursue their own self-interest.
The outcomes and payoffs of this game are shown in Figure 1 below.
Figure 1: Outcomes and payoffs for the climate strategy game.
Question 1
What is the Nash equilibrium of the game shown in Figure 1? Show the steps you took to
reach this conclusion. Is this Nash equilibrium a prisoners’ dilemma? Why or why not? [2
marks] [max words: 100]
Question 2
Suppose there is a change in social preferences in both developing and developed nations.
Figure 2 shows the new payoffs for the climate strategy game in this case. What are the Nash
equilibria of this game? Show the steps you took to reach this conclusion. [2 marks] [max
words: 100]
MACQUARIE
BUSINESS SCHOOL
Department of Economics
Figure 2: Payoffs for the climate strategy game with social preferences.
Question 3
The ideal outcome for the climate strategy game is one in which a dominant strategy
equilibrium is achieved when both groups of countries choose to abate emissions. Explain
how a change in the rules of the game could lead to a potential solution to the social
dilemma of climate change. [3 marks] [max words: 200]
PART B
Emissions reduction treaties between nations have been proposed as a key method with
which to tackle climate change and its negative impacts. One such treaty is the Paris
Agreement. Adopted by 197 nations in 2015, the deal aims to substantially reduce carbon
emissions and to limit the global temperature increase in this century to 2 degrees Celsius.
A summary of the Paris Agreement can be found here.
The Paris Agreement includes commitments from all nations to reduce their emissions and
work together to adapt to the impacts of climate change and calls on a strengthening of
commitments over time. The agreement provides a pathway for developed nations to assist
developing nations in their climate mitigation and adaptation efforts. Nations can set their
own ‘nationally determined contributions’ towards emissions reductions that reflect their
capabilities, level of economic development, and contribution to emissions over time.
Question 4
Binding treaties to abate emissions between groups of nations are often difficult to achieve.
Explain why this is the case. You must cite at least one reputable source from your own
research. Include the full reference at the end of your answer, which will not count towards
the word limit. Use a standard referencing system (e.g. Harvard style). [3 marks] [max
words: 200]
MACQUARIE
BUSINESS SCHOOL
Department of Economics
Question 5
Discuss three reasons why the Paris Agreement treats developing nations differently from
developed nations. You must cite at least one reputable source from your own research.
Include the full reference at the end of your answer, which will not count towards the word
limit. Use a standard referencing system (e.g. Harvard style). [3 marks] [max words: 200]
Question 6
Evaluate the decision to distinguish between developed and developing nations in the Paris
Agreement from the perspective of substantive and procedural judgements of fairness. Be
sure to define both judgements of fairness in your answer. [5 marks] [max words: 500]
Question 7
The Paris Agreement is based on voluntary carbon emissions reduction pledges made by
participating nations. Using either a consequentialist or a deontological framework, discuss if
it would be ethically acceptable to legally impose these emission reduction pledges and
enforce these goals with penalties? Explain your reasoning. Be sure to define your chosen
ethical framework in your answer. [5 marks] [max words: 500]
PART C
Moving a nation’s source of power from fossil fuels (such as coal) to clean energy sources
(such as solar) can reduce carbon emissions.
Suppose the price of a unit of coal (PC) is $50 and the price a unit of solar (PS) is $30. A
representative power plant can use a mixture of coal and solar inputs to produce one unit of
electricity.
The power plant has two types of technologies available to them to produce one unit of
electricity:
Coal (C) Solar (S)
Technology A 10 units 2 units
Technology B 3 units 20 units
Assume that the power plant uses no other inputs in its production process.
Question 8
Calculate the production costs required for the two types of technology to produce one unit
of electricity. Show your workings. Which technology would the power plant choose? [2
marks] [max words: 100]
MACQUARIE
BUSINESS SCHOOL
Department of Economics
Question 9
Using an isocost diagram, model a change in relative prices that would incentivise a shift in
technologies from the choice you indicated in your answer to Question 8. On your diagram,
be sure to state the new prices and include all isocost lines (before and after the change in
prices). Label the intercepts and slopes of the isocost lines and show the resultant choice of
technologies, along with their associated quantities before and after the change in prices.
Calculate the innovation rent that arises due to this switch in technologies, show your
working. [10 marks] [max words: 100]
DOCUMENT PREPARATION CHECKLIST
BEFORE YOU SUBMIT
☐ My assignment is written in full sentences and clear formal language.
☐ My assignment is proofread, and errors and typos are minimised.
☐ My assignment is written within the word limit for each question.
☐ Diagrams are drawn clearly and fully labelled. Poorly drawn diagrams reflect poor
communication which may result in loss of marks.
☐ Diagrams are not distorted and are properly inserted into the document.
☐ I have read the rubric on the next page and made sure that my assignment meets the
criteria.
AFTER YOU SUBMIT
 I have double-checked whether the document was properly uploaded.
 I have received the Turnitin receipt via email.
 I have seen my originality report (generated after the deadline).
MACQUARIE
BUSINESS SCHOOL
Department of Economics
ECON1020 INDIVIDUAL ASSIGNMENT RUBRIC
Criteria Fail (F) Pass (P) Credit (Cr) Distinction (D) High Distinction (HD)
Visual Communication –
Diagram Illustration
Applies to Q9
Diagrams are demonstrated
to effectively reflect the
given scenarios via
appropriate economics
concepts/theories.
Diagrams are fully labelled.
Not attempted, significantly
plagiarised, or very poor use of
diagrams. Students demonstrate poor
understanding of the given scenario or
relevant economic concepts/theories.
Diagrams are poorly labelled.
Student ordinarily demonstrates ability
to communicate with diagrams and
ordinarily reflect the real-world scenario
using some economic concepts/theories.
Diagrams are partially labelled.
Student satisfactorily
demonstrates ability to
communicate with diagrams and
appropriately reflect the realworld scenario using some
relevant economic
concepts/theories.
Diagrams are partially labelled.
Student effectively demonstrates
ability to communicate with
diagrams and appropriately reflect
the real-world scenario using
some relevant economic
concepts/theories.
Diagrams are fully labelled.
Student effectively demonstrates
ability to communicate diagrams
and appropriately and insightfully
reflect the real-world scenario using
all relevant economic
concepts/theories.
Diagrams are fully labelled.
Written Communication –
Analysing Issues
Applies to Q1, Q2, Q3, Q8
Given scenarios are analysed
using relevant and
appropriate economic
concepts/theories.
Text has formal structure
with good text logic.
No attempt, significantly plagiarised, or
student fails to demonstrate an
analysis substantiating any of made
claims through economic
concepts/theories. Student simply
provides personal opinions with no
analysis.
Text has no formal structure. Very poor
text logic with frequent use of
contradictions.
Student ordinarily demonstrates an
analysis, develop poor arguments,
struggling to substantiate claims through
few and/or irrelevant economic
concepts/theories. Student mostly
provides personal opinions and limited
analysis.
Text has under-developed formal
structure. Poor text logic with recurrent
use of contradictions
Student accurately demonstrates
an analysis; develops fair
arguments but they lack
substantiation through relevant
economic concepts/theories.
Text has formal structure.
Satisfactory text logic with some
use of contradictions.
Student accurately demonstrates
an analysis; skilfully develops
arguments, substantiating made
claims through relevant economic
concepts/theories.
Text has clear and well-developed
formal structure. Excellent text
logic with minuscule use of
contradictions.
Student accurately and insightfully
demonstrates an analysis;
masterfully develops arguments,
substantiating made claims through
relevant economic
concepts/theories.
Text has clear and original formal
structure. Outstanding text logic
with no use of contradictions.
Written Communication –
Communicating Solution via
Research
Applies to Q4, Q5
A clear overall argument is
derived based on analysis,
demonstrating independent
well-reasoned judgement.
Relevant and reputable
sources are used and
properly cited/referenced.
No attempt, significantly plagiarised, or
solution is fundamentally flawed
and/or contains excessive detail
without argument.
Irrelevant and non-reputable sources.
Referencing is non-conforming to
standard style and/or absent.
Solution is basically sound with some
judgement but not based on analysis.
Irrelevant or non-reputable sources.
Referencing is mainly inaccurate and/or
does not conform to a standard style.
Solution is sound with appropriate
judgement based on analysis.
Relevant or reputable sources.
Referencing is fairly accurate using
standard style.
Solution is very sound with
comprehensive judgement based
on analysis.
Relevant and reputable sources.
Referencing is accurate using
standard style.
Solution is excellent, with evidence
of originality and comprehensive
judgement based on analysis.
Relevant and reputable sources.
Referencing is accurate using
standard style.
Ethical Thinking
Applies to Q6, Q7
Demonstrate an ability to
use ethical frameworks to
evaluate economic
outcomes in real-world
applications.
No attempt, significantly plagiarised, or
student does not demonstrate an
ability to use ethical frameworks and
evaluate economic outcomes in realworld applications.
Student poorly demonstrates an ability
to use ethical frameworks and evaluate
economic outcomes in real-world
applications.
Student satisfactorily
demonstrates an ability to use
ethical frameworks and evaluate
economic outcomes in real-world
applications.
Student effectively demonstrates
an ability to use ethical
frameworks and evaluate
economic outcomes in real-world
applications.
Student effectively demonstrates an
ability to use ethical frameworks
and evaluate economic outcomes in
real-world applications. Student
identifies differences across ethical frameworks.