The guide below is constructed around the separate parts of the question. Question 1 a) Describe the market, products/services and justify your classification of this market as monopolistic competition Your description should be brief but demonstrate a key understanding of the structure, conduct and performance of this industry / market. You must justify this selection as being an example of monopolistic competition, and do this you must relate your description to aspects of the theory. To put that another way, you must apply theory. ) Describe and discuss the types of producers/suppliers in this market, focusing on the various tactics and strategies you observe which typify their competitive behaviour This is just adding detail to the description of the market, where we focus on behaviour (conduct) of the sellers. Again – applying theory. c) Discuss what you observe about consumer behaviour in this market, and how you think consumers respond to the competitive behaviour of suppliers Here we move focus to outcomes for consumers, and so we get closer to performance. Do we get the results from this market that we would expect? )
Explain and discuss aspects of this market where Government intervention, in any form, impacts on this market and its participants e) Critically evaluate the role of government; does it help or hinder competition? What impact does it have on consumers? These two aspects belong somewhat together, but are designed to get you to consider the role of Government in markets. Again, you should be considering structure, conduct and performance in this market, and think of Government role in that light. Again, we are applying theory to consider the role of Government. ) Summarise your own findings about this market and critically evaluate the relevant economic theory in the light of what you see in practice. The key words are underlined and should be considered as criteria for marking. Here you can apply theory and use it to evaluate a market (summarise findings), you can also critically evaluate the theory in the light of what we observe in a market. General comments You only have 1500 words, so you will need to be succinct. With just 1500 words you should make sure that your words address the questions, don’t waste time off track.
You will need to mention the theory, so you will need to reference sources. You may also need to reference sources of fact about your chosen market, but your own observations are also good to see here. This essay is designed for you apply economics to a consider and evaluate real world market that you observe. You cannot do that well unless you use your own thinking and your own words to make conclusions. Question 2 For your chosen area or region, select an issue regarding negative externalities and/or scarce common resource use. Here you may choose any issue that you please, any issue that is of interest or concern to you.
The key here, as comes out in part a) of the question, is that the issue you select should be one that will enable you to point to and discuss market failure that leads to economic costs. Explain the key issues here for society and point out where market failure needs to be addressed. Explain the important social and private costs that apply here. Note that the word ‘explain’ means you should do more than just describe. Explain implies that you discuss how and why we find issues and costs here. Critically evaluate the current Government actions, or lack of action, in intervening to correct for market failure.
Depending on the situation / region / issue etc that you choose, there may be already considerable government action or none. You should apply economic theory to the situation / issues that you observe and consider what would be possible government intervention approaches. That will be the basis on which you can critically evaluate what Government has done (or has not done) until now. What recommendations would you suggest to best overcome the inefficiencies resulting from this market failure. In your response consider direct government laws/actions as well as possible market-based solutions.
This section follows naturally from the last, and allows you to expand on what you think, from an application of economic theory, would be ways of resolving the market failure. General comments This question has less parts than question 1, but each part may require more words. Again, you have just 1500 words so be concise. Again you must reference your sources for economic theory and you may need to reference your sources for facts about the negative externality / scarce common resource that you write about. Again, your own observations and logic are good to see, but try to apply economic theory to justify your thoughts and conclusions.
