SUMMATIVE ASSIGNMENT

Overall word limit: 3,000 words (excluding charts, graphs/diagrams, figures, and references; see below for more details)

There are 6 questions, each consisting of several parts. You must answer ALL questions. The weight of each question in the total assignment mark is indicated below. All parts within each question carry equal weight.

Please note: Any graphs / diagrams submitted as part of the assessment must be drawn using MS Office or an equivalent software. They must NOT be drawn by hand.

1. [15%] Use verbal and graphical analysis in answering a) and b).

Suppose the government aims to inject demand into the economy and REDUCES the specific tax levied on a particular good.

a) Assuming equal elasticities of demand and supply, detail the market’s move from the equilibrium with the initial (higher) tax to the new equilibrium with the new reduced tax.

b) Explain how consumer welfare, producer welfare and government welfare change due to the reduction in the tax levy.

2. [20%] Use verbal and graphical analysis in answering a) - c).

Suppose there are no government subsidies to higher education.

a) Explain the private market equilibrium that will result according to the Law of Demand and Supply without any subsidies.

b) How and why does the private market equilibrium differ from the efficient market outcome?

c) Now suppose the government decides to subsidise higher education. Explain what effect the subsidy will have on the market outcome.

d) Might there be any controversy around the use of the subsidy, if it was funded through an increase in income tax (verbal answer only)?

3) [15%] Use verbal and graphical analysis in answering a) and b).

Suppose a pharmaceutical company has produced and patented a drug against dementia and offers the drug to all customers at the same price.

a) What market structure will securing the patent most likely impose on the market for the drug? In what way is this market structure beneficial to the company?

b) Explain why this market structure is in many cases considered undesirable by governments and many market participants and observers?

c) With regard to your answer to part b), explain (verbally only) why, in this particular case, this market structure may be acceptable for a certain period of time. [You could link your answer to that to question 2 b).]

4. [10%]

Explain how moral hazard can result from asymmetric information. In each of the following two cases, identify the principal and the agent, the asymmetric information held, and the resulting potential moral hazard. How is the action described in each case intended to reduce the problem of moral hazard?

a) A landlord requires their tenants to pay a security deposit at the start of the tenancy.

b) A car insurance company offers discounts to customers who install an anti-theft device in their car.

5. [25%]

Find ONE news article of your choice, that relates to the workings of a theory / concept from the module. Using this theory / concept, explain in detail the economic problem related in the article, as if presenting to colleagues who have no economics background knowledge. Use verbal as well as graphical analysis. Link to relevant other theories / concepts from the module as applicable. Begin your answer by briefly outlining the economic problem.

Please provide the online link to the article in your reference list or insert a copy of the article into your assignment as an appendix. Please note, you must NOT use any of the articles discussed in the module lectures or seminars.

6. [15%]

Find a sustainability report of ONE business of your choice. With reference to sustainability-related issues discussed in the module and with reference to some literature, analyse in what ways the business is seeking to increase its levels of sustainability. Explain possible benefits and challenges of implementing these sustainability practices for the business.

Please provide the online link to the sustainability report in your reference list. Please note, you must NOT use any business whose sustainability report is discussed in the module lectures or seminars.

SUBMISSION INSTRUCTIONS

Your completed assignment must be uploaded to Blackboardno later than 12:00 midday on 2nd May 2025.

The assignment should be submitting using one of the following file types: .doc, docx or .pdf

A penalty will be applied for work uploaded after 12:00 midday as detailed in the Student Information Hub. You must leave sufficient time to fully complete the upload process before the deadline and check that you have received a receipt. At peak periods, it can take up to 30 minutes for a receipt to be generated.

Assignments should be typed, using 1.5 spacing and an easy-to-read 12-point font. Assignments and dissertations/business projects must not exceed the word count indicated in the module handbook/assessment brief.

The word count should:

Include all the text, including title, preface, introduction, in-text citations, quotations, footnotes and any other items not specifically excluded below.

Exclude diagrams, tables (including tables/lists of contents and figures), equations, executive summary/abstract, acknowledgements, declaration, bibliography/list of references and appendices. However, it is not appropriate to use diagrams or tables merely as a way of circumventing the word limit. If a student uses a table or figure as a means of presenting his/her own words, then this is included in the word count.

Examiners will stop reading once the word limit has been reached, and work beyond this point will not be assessed. Checks of word counts will be carried out on submitted work, including any assignments or dissertations/business projects that appear to be clearly over-length. Checks may take place manually and/or with the aid of the word count provided via an electronic submission. Where a student has intentionally misrepresented their word count, the School may treat this as an offence under Section IV of the General Regulations of the University. Extreme cases may be viewed as dishonest practice under Section IV, 5 (a) (x) of the General Regulations.

Very occasionally it may be appropriate to present, in an appendix, material which does not properly belong in the main body of the assessment but which some students wish to provide for the sake of completeness. Any appendices will not have a role in the assessment - examiners are under no obligation to read appendices and they do not form part of the word count. Material that students wish to be assessed should always be included in the main body of the text.

Guidance on referencing can be found on Durham University website and in the Student Information Hub.

MARKING GUIDELINES

Performance in the summative assessment for this module is judged against the following criteria:

Relevance to question(s)

Organisation, structure and presentation

Depth of understanding

Analysis and discussion

Use of sources and referencing

Overall conclusions

PLAGIARISM AND COLLUSION

Students suspected of plagiarism, either of published work or the work of other students, or of collusion will be dealt with according to School and University guidelines.

END OF ASSESSMENT