经济学原理 MAE101 Individual Assignment 代写

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经济学原理MAE101 Individual Assignment 代写

MAE101 Economic Principles, T2, 2017

Individual Written Assignment

Due date Monday 4 th September 2017

This assignment is worth 25% of your final mark for MAE101. There is a 2,000 word

limit.

Please read the following instructions carefully:

An electronic copy must be submitted to the unit website by 11:59 pm Monday 4 th

September 2017. 1 You are strongly encouraged to submit before then to ensure that it

is submitted on time. Assignments submitted after the due date without an approved

extension will incur a penalty as follows:

• 5% will be deducted from available marks for each day up to five days (that is, you

will lose 1.25 marks for each 24 hour period after the due date, up to five days);

and

经济学原理MAE101 Individual Assignment 代写

• where work is submitted more than five days after the due date, the assignment

will not be marked and 0% be awarded.

Digital literacy is one of the Deakin’s Graduate Learning outcomes and among the

Unit Learning Outcomes of MAE101. It requires students to be capable of using

modern technologies to find, use, and disseminate information. To achieve this goal,

it is required that all contents of your assignment should be digitally produced,

including explanations, diagrams, etc.

To receive full marks you must show clear development and expression of economic

ideas in clear paragraphs in addition to the correct answers. Please use concise,

properly constructed sentences and paragraphs. Please also use 12pt sized font. You

must cite all ideas that are not your own. Do not just quote chunks of text – you must

express your answer in your own words.

You may study with other students, discuss the assignment with whomever you wish

and even outline answers with others. However, you must write this assignment on

your own. Software will check each assignment for plagiarism and collusion. We

realize that some sentences will occur in different students’ work because there are

few ways to say them, e.g., “Price decreased from P1 to P2.” However there should be

few such matches between any two assignments. Even the process of resolving the

case of accidentally matching someone else’s work can be time-consuming and

upsetting for students.

1 All assignments are to be submitted online in the assignment drop box in CloudDeakin.

MAE101 Individual Assignment T2, 2017

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Plagiarism and collusion constitute extremely serious academic misconduct. They

are forms of cheating, and severe penalties are associated with them. So, please do

your own work. It is also very good preparation for the exam.

By clicking the SUBMIT button to submit your assignment to the unit assignment

drop box, you are declaring that the assignment work is entirely your own except

where material quoted or paraphrased is acknowledged in the text. You are also

declaring that it has not been submitted for assessment in any other unit or course.

For more information about plagiarism and collusion, please go to the Study Support

website: http://www.deakin.edu.au/current-students/study-support/study-

skills/handouts/refer-plag.php

You must draw all diagrams by software. Please keep in mind that your future

employers will expect you to be proficient with computers and that hand-drawn

diagrams are usually unacceptable in professional business documents. A short video

clip on how to draw graphs by computer in MSWord is available under the Assessment

Resources, Assignment 1 folder in CloudDeakin.

In some MSWord document submissions, graphs and other parts of the assignment

may disappear and hence receive no grade. Hence, we prefer that you convert the

assignment to PDF.

Requirements:

• Read through your work prior to submission, checking your spelling and

grammar.

• No more than 2,000 words in total excluding the task statements, tables,

diagrams, and references. It is preferable if you do not include the actual task

statements; just include the task number.

• All content is electronically generated.

• Convert your assignment to PDF format and check that all text, graphs, tables

and formatting are accurate.

• Make sure that you are using correct referencing.

There are 80 marks total for Assignment 1. This will be converted to 25% of your

final assessment.

MAE101 Individual Assignment T2, 2017

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ABOLITION OF MAHOGANY HARVESTING, INCENTIVES, AND HOMICIDE

Background

An important area of economics is the analysis of conflict. While many social and

political factors drive conflict, we here focus on economic causes. The aim of this task

is to explore the links between economic activity and violence. We will use as a case

study the harvesting of big leaf mahogany from Brazilian forests. Big leaf mahogany

is one of the most beautiful and valuable woods in the world. 2 Brazil has been the

main producer of big leaf mahogany timber. Concerns with excessive destruction of

the Amazon and decline in the number of mahogany trees led to the eventual abolition

of harvesting of big leaf mahogany in 2001. In this case study we will investigate

whether making the harvesting of mahogany illegal had the unintended consequence

of increasing homicide. When markets are legal, disputes can be settled through the

justice system. However, when an activity becomes illegal, the justice system is no

longer available and disputes are often resolved through direct violence.

Figure 1: Brazilian big leaf mahogany forest

Figure 2: Harvesting Brazilian mahogany

2 International trade of mahogany timber can be traced back to around 1700.

MAE101 Individual Assignment T2, 2017

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Figure 3 illustrates patterns in Brazilian mahogany exports and other tropical timber

species during four time periods: (A) before government policy towards harvesting

changed significantly; (B) the period between 1999 and 2001 when 85% of licenses to

harvest were revoked; (C) the period 2001 to 2008 when harvesting was banned but

the government did not actively enforce the ban; and (D) the post-2008 period when

greater penalties and enforcement were implemented. The graph illustrates that these

government interventions reduced reported mahogany exports. However, at the same

time, there was a significant increase in exports of “other tropical timber species” once

regulations made it harder to harvest mahogany (period B) and then when mahogany

harvesting was made illegal (period C). Exports of all timber products fell once greater

enforcement of the law was introduced in 2008. These movements suggest that illegal

harvesting of mahogany continued in the guise of ‘other’ timber until the ban on

harvesting was enforced.

Figure 3: Government Intervention and Mahogany and Tropical Timber Exports

Notes: The thick black line is the sum of Brazilian exports of mahogany and other tropical timber species.

Source: Modified from Chimeli, A. B. and Soares, R. R. The Use of Violence in Illegal Markets: Evidence from Mahogany

Trade in the Brazilian Amazon, American Economic Journal: Applied Economics, forthcoming.

Our two broad research questions are:

1. What impact did government intervention have on equilibrium price, quantity,

and welfare?

2. Did the ban on mahogany harvesting increase homicide?

MAE101 Individual Assignment T2, 2017

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Task A: Welfare Effects of Government Intervention

For this task you need to consider the market for mahogany from a theoretical

perspective, i.e. you do not need to analyse data. To simplify the analysis we will

assume that there are no externalities involved in the production or consumption of

mahogany. (Externalities are discussed in week 9 of the course.)

(a) In an attempt to reduce the harvesting of mahogany, the Brazilian government

introduced a tax on producers for each ton of mahogany harvested. Use a demand

and supply diagram to illustrate the market for big leaf mahogany before and after

the tax. Explain the impact of the tax on equilibrium price, quantity traded, and

welfare. (For this question assume a standard downward sloping demand curve

and upward sloping supply curve.)

(5 Marks)

(b) In 1998, the Brazilian government introduced a harvesting quota that limited how

much mahogany could be harvested. Use a demand and supply diagram to

illustrate and explain the impact of the quota on equilibrium price, quantity traded,

and welfare. (For this question ignore the existence of the tax.)

(5 Marks)

three scenarios, use a separate demand and supply diagram to illustrate and

briefly discuss what happens to the equilibrium price and quantity traded. (Hint:

consider whether the change affects any of the determinants of demand or of

supply, and in which direction.)

i. Producers fear punishment and the consumption of mahogany products

becomes undesirable because of the stigma associated with possessing such

products.

(3 Marks)

ii. Producers fear punishment and the consumption of mahogany products

becomes desirable as consumers derive satisfaction from possessing illegal

goods.

(3 Marks)

iii. In 2008, the Brazilian government significantly improved its monitoring of

illegal harvesting, enforced the law, and increased penalties for illegal

harvesting. Producers fear punishment and there is no change in the

desirability of mahogany.

(3 Marks)

(3 + 3 + 3 = 9 Marks Total for (c))

MAE101 Individual Assignment T2, 2017

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(d) An economist advises the Brazilian government that the tax discussed in (a) above

will be ineffective in reducing the harvesting of mahogany if the demand for

mahogany is very inelastic. Her advice is that a more effective way to reduce

mahogany harvesting is to reduce demand for mahogany. Use a diagram to

explain the logic behind this economist’s advice.

(8 Marks)

(27 Marks Total for Task A)

Task B: Production Decisions

For this task we consider some of the incentives faced by producers and their

production decisions.

(a) According to an OECD report (2007, p. 19-20): “Illegal wood is not burdened by

taxes, stumpage fees and expenses for compliance with forest and environmental

regulations. It is therefore cheaper to produce than legal wood. … illegal logging

is substantially more profitable than the legal kind and that there is therefore a

clear financial incentive to engage in illegal activities.”

For questions (i) to (iii) below we will compare legal to illegal harvesting. For these

questions assume that demand remains the same for both legal and illegal

operators and assume that there are numerous competing firms with no barriers

to entry or exit.

i. Harvesting mahogany was legal until 2001. With the aid of a diagram illustrate

the profit maximising production decision of firms that were legally harvesting

mahogany.

(3 Marks)

ii. In 1999 the Brazilian government revoked 85% of harvesting licenses.

However, there was little attempt to enforce the law; firms were able to sell

mahogany in the guise of other types of timber and illegal trade was enabled

by corrupt officials. Moreover, firms that operated illegally no longer needed

to meet regulatory requirements and could avoid paying taxes. On the same

diagram as (i) above, illustrate and explain the incentives and short-run profit

maximising production decisions of firms that are illegally harvesting

mahogany. (For this question assume that the total number of firms remains

unchanged; firms that lose their license to operate legally are replaced by firms

who operate illegally.)

(5 Marks)

MAE101 Individual Assignment T2, 2017

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iii. Now consider what happens if the Brazilian government starts to enforce the

law to prevent illegal harvesting. What happens to the operating cost

differences between legal and illegal harvesting firms? Explain your reasoning.

(No diagrams are required for this question.)

(2 Marks)

(3 + 5 + 2 = 10 Marks)

(b) A Greenpeace report (2001, p. 8) argued that the Brazilian mahogany trade: “is

dominated by a small élite group of sawmills and exporters controlled largely by

two powerful players: Moisés Carvalho Pereira and Osmar Alves Ferreira.

Between them, these two mahogany kings …. control over 80% of the total

mahogany timber export trade from Pará.”

i. If Greenpeace’s depiction is correct, what does it imply about the structure of

the mahogany market? Explain your reasoning.

(2 Marks)

ii. Instead of competing against each other, Pereira and Ferreira decide to

collude.

1. With the aid of a diagram illustrate and explain the consequences on the

price of mahogany and profits for the mahogany kings in the short-run.

(5 Marks)

2. What is the impact of collusion on the health of the mahogany tree

population?

(1 Mark)

3. Is collusion between the mahogany kings a sustainable long-run strategy?

Explain your answer.

(3 Marks)

(2 + 5 + 1 + 3 = 11 Marks Total for (b))

(21 Marks Total for Task B)

MAE101 Individual Assignment T2, 2017

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Task C: Impact on the Homicide Rate

Recall from the Background section to this assignment and Figure 3 above, that the

2001 ban on harvesting did not actually reduce harvesting. Instead, firms resorted to

illegal harvesting, falsely classifying mahogany as other tropical timber. During this

period, disputes erupted between rival firms that were settled outside the justice

system, often with violence. For this next task we wish to test whether violence did

increase as a result of the ban on mahogany harvesting.

You will need to use the data provided in the Excel file Mahogany and Homicide in the

Assignment 1 – Individual Assignment folder (within the Assessment Resources folder) to

assess the impact of the banning of mahogany harvesting on homicide in Brazil. The

data relate to the period 1995 to 2013 for 128 municipalities in the Pará province of

Brazil; 70% of Brazilian mahogany grows in this province. The sample contains 2,432

observations on the homicide rate in these municipalities (128 municipalities for 19

years = 2,432 observations). This type of data is known as panel data. The homicide

rate is calculated as the number of homicides per 100,000 inhabitants. The data come

from: Chimeli, A. B. and Soares, R. R. The Use of Violence in Illegal Markets: Evidence

from Mahogany Trade in the Brazilian Amazon, American Economic Journal: Applied

Economics, forthcoming. 3 However, you do not need to read this study. Note that you

can use Excel or any other software to construct the graph and calculate averages

required in (a) and (b) below.

(a) Construct a graph of the homicide rate for all Pará municipalities, for the years

1995 to 2013.

(5 Marks)

(b) Using the data provided complete Table 1 below. For this question, you need to

calculate the average homicide rate for the four time periods listed in Column (1)

of the table. Report the average homicide rate for all mahogany growing areas in

Column (2), and the average homicide rate for areas without mahogany in Column

(3). In Column (4) report the difference in the homicide rate between areas with

mahogany and areas without mahogany. 4 (Hint: you will find these calculations

much easier if you sort the data by mahogany growing area and by year. This can

be done in Excel.)

3 Web address for the article is: https://www.aeaweb.org/articles?id=10.1257/app.20160055. You can

only access this article if you are a member of the American Economic Association. A working paper of

an older version of this study can be found at: http://ftp.iza.org/dp5923.pdf.

4 This type of analysis is known as a difference-in-difference analysis and is very common in the

evaluation of various government and business policies.

MAE101 Individual Assignment T2, 2017

~ 9 ~

Table 1: Comparison of average homicide rates,

municipalities with and without mahogany, different periods

Period

(1)

经济学原理MAE101 Individual Assignment 代写

Areas with

mahogany

(2)

Areas without

mahogany

(3)

Homicide rate

difference between

municipalities

(4)

Pre-1999.

Pre major government

intervention

1999 to 2001.

85% of licenses revoked

2001-2008.

Harvesting banned

Post-2008.

The law is enforced

(10 Marks)

the average homicide rate after mahogany trade became illegal?

(2 Marks)

(17 Marks Total for Task C)

Task D: Lessons and Reflections

According to Chimeli and Soares (2017), making mahogany harvesting illegal resulted

in 5,171 additional deaths. The aim of this task is to reflect back on Brazil’s experience

with various interventions in the mahogany market.

(a) What lessons can be learnt by other countries from Brazil’s experience regarding

(i) the regulation and taxation, and (ii) the abolition of undesirable economic

activities and the unintended consequences of government intervention?

(5 Marks)

MAE101 Individual Assignment T2, 2017

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(b) One of the principles of economics is that rational self-interest can maximize social

welfare. However, there are also legitimate concerns for the survival of mahogany

and other species and the adverse consequences from deforestation in general.

i. Explain why unregulated harvesting can lead to market failure, e.g., more

harvesting than is socially desirable.

(5 Marks)

ii. In addition to the above government interventions, several market based

solutions have been implemented or considered.

1. One market solution is to grow mahogany in other countries. Brazil has a

natural geographic advantage in growing mahogany. Referring to

opportunity cost, explain what is likely to happen to the cost of growing

mahogany now that Brazil is no longer a producer?

(2 Marks)

2. Discuss one other solution that the market might come up with to reduce

the danger of species extinction? (Hint: consider factors that shift the

demand or supply of mahogany.)

(3 Marks)

(15 Marks Total for Task D)

END OF ASSIGNMENT 1 TASKS

MAE101 Individual Assignment T2, 2017

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REFERENCES

Please note that you do not need to read any of the below references. The lecture

notes and textbook are sufficient to answer all the tasks in this assignment.

1. Chimeli, A. B. and Soares, R. R. The Use of Violence in Illegal Markets: Evidence

from Mahogany Trade in the Brazilian Amazon, American Economic Journal: Applied

Economics, forthcoming.

2. Contreras-Hermosilla, A., Doornbosch, R., and Lodge, M. 2007. The Economics of

Illegal Logging and Associated Trade, OECD, Paris, 8-9 January 2007

https://www.oecd.org/sd-roundtable/papersandpublications/39348796.pdf.

Accessed July 6 th , 2017.

3. Greenpeace. 2001. Partners in Mahogany Crime: Amazon at the mercy of ‘gentlemen’s

agreements’. Greenpeace International, Amsterdam.

http://www.greenpeace.org/international/PageFiles/26258/Mahoganyweb.pdf.

Accessed July 1 st , 2017.

4. Wallace, S. 2013. Mahogany’s Last Stand. National Geographic.

http://ngm.nationalgeographic.com/2013/04/mahogany/wallace-text. April 2013.

Accessed July 1 st , 2017.

5. World Bank. 2012. Justice for Forests Improving Criminal Justice Efforts to Combat

Illegal Logging. The World Bank, Washington.

http://siteresources.worldbank.org/EXTFINANCIALSECTOR/Resources/Illegal_

Logging.pdf. Accessed July 1 st , 2017.

经济学原理MAE101 Individual Assignment 代写