ECONOMICS FOR MANAGERS
Due date: Thursday, 11:59pm, January 16, 2020 Nature: Individual assignment.
Assignment Overview: This assignment is partly based on the attached two articles, “2018 Real Estate Outlook: The Australian Perspective,” Deloittee, February 2018 (pages 1-10), and “House Price Falls May Be Ending, But Do Not Expect Another Boom,” by Michael Janda, ABC News, July 19, 2019. Please read this articles before attempting the questions. You will be required to demonstrate your understanding of economic concepts taught in the unit and relate them to the cases in the articles.
Learning Objectives: This assignment is designed to encourage you to think about the applications of economic concepts learned in this unit to real world scenarios.
Assessment: Based on the attached Rubric, your assignment will be graded on your use of appropriate economic theory and concepts, clarity of exposition and overall quality of your answers.
Questions: Answer all questions. Limit the total word count of your assignment to less than 3,000 words. Depth is encouraged over breadth: that is, it is more important that you demonstrate you understand a concept fully, rather than talk about 3 related concepts only cursorily. You are encouraged to provide necessary graphs, figures and data wherever possible. Please be careful in implementing referencing styles.
Total mark: 40 marks. Allocation as indicated next to the question. Your score on this assignment contributes towards 40% of your final score for this unit.
Submission: This assignment must be submitted online (Assessment’s Dropbox) by 11:59pm on the due date. No hard copy is required. Print your name and student ID clearly on the first page of your answers. Please check the Academic Honesty and Misconduct section in the Unit Guide. Submitting your answers automatically implies that you have read and accepted the Plagiarism and Collusion Declaration, and that the submitted answers are entirely your own work.
Late submission: The university policy on late submission of assignments is as follows:
Penalties for late submission of assessment tasks
(46) A due date and time will be set for the submission of each summative assessment task. A marking penalty will be applied where the assessment task is submitted after the due date without an approved extension as follows:
5% will be deducted from available marks for each day up to five days
where work is submitted more than five days after the due date, the task will not be marked and the student will receive 0% for the task.
‘Day’ means working day for paper submissions and calendar day for electronic submissions.
Question 1: (10 marks)
In your own words, summarize the two articles,
“2018 Real Estate Outlook: The Australian Perspective,” Deloittee, February 2018 (pages 1-10)
“House Price Falls May Be Ending, But Do Not Expect Another Boom,” by Michael Janda, ABC News, July 19, 2019.
In particular, what are the main messages of the articles?
Question 2: (10 marks)
Suppose that the Melbourne’s housing market is perfectly competitive (i.e., many real estate developers). The city government decides to introduce a buyer’s tax (specific tax) on housing purchases.
Using appropriate diagrams to answer:
(a). Examine the impacts of this buyer’s tax on the equilibrium housing prices, consumer surplus, producer surplus, and total surplus (or social welfare).
(b). Can the introduction in the buyer’s tax raise social welfare?
(c). Can the introduction in the buyer’s tax raise city government’s tax revenue?
Question 3: (10 marks)
Suppose that city government decides to develop a new housing area (i.e., the city government is like a monopolist).
Using appropriate diagrams to answer:
(a) If the city government’s objective is to maximize profits, what would be the housing price set in this new area?
(b) If the city government’s objective is to maximize revenue, what would be the housing price set in this new area?
(c) If the city government’s objective is to maximize welfare, what would be the housing price set in this new area?
Question 4: (10 marks)
Find at least three countries or economies that have housing policies or measures to stabilize the housing markets.