ASSESSMENT:

Answer all questions, each is worth 1.5 marks. For detailed assessment criteria see the subject guide, which also explains that the assessment looks at the quality of your answers, not the quantity. You can be relatively brief, for most of the questions a 100 words' answer will be sufficient (some may require up to 200 words). But make sure you address the gist of the questions and do so by using your own words. Many of the questions do not have a right or wrong answers; we are interested in your own thinking and developing your ability to communicate ideas and structure arguments.

On Public Policies and Microeconomic Regulation

Ronald Reagan, the 40th President of the United States, said in 1986: "Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it." Is Ronald Reagan's above description of how governments view the economy accurate? Are governments always the evil institutions that interfere with the markets by excessive taxation and bureaucratic regulation, or can government policies actually improve economic outcomes and people's wellbeing?

Professor Stephen King discussed his views on the optimal design of microeconomic policies and regulation in an interview with Dr Jan Libich conducted on May 21, 2014 at La Trobe University. Prof King is well equipped to provide insights into public policy due to his unique blend of experience: as author of influential academic research and a popular textbook, as Dean of Business and Economics at Monash University, and as Commissioner of the Australian Competition and Consumer Commission (ACCC). He has also served as expert witness in numerous inquiries by public agencies (such as the Senate, Australian Federal Court and Australian Competition Tribunal), and advised many private business on competition matters.

IDENTIFYING KEY ISSUES AND SUMMARIZING THE BIG PICTURE

1) Watch the interview at http://youtu.be/40LAb_VxQ6Qu, you can put the subtitles on if you need to. Summarise it in about 5 sentences (Note: being able to produce such summaries is valuable in the workplace).

CONNECTING ECONOMIC THEORY TO POLICY

2) Why does a ‘natural monopoly' occur? Why and how should policymakers deal with it in your view?

3) What are the possible approaches of the government towards ownership and regulation of utilities such as electricity, gas, and road networks? What is Prof King's view on which approach is the most efficient? What is your view? Use data or examples from the internet to support your answer.

4) Is Prof King an advocate of the ‘no surcharge' policy on credit cards? Outline his argument and attempt to apply relevant economic theory if you can. Then go to www.accc.gov.au/business/pricing/displaying- prices and express your views on the current regulation of credit card surcharges as outlined there (Note: you do not need to read the whole page, just search for ‘credit card surcharge').

CRITICAL THINKING & REFLECTION

5) Write down one idea discussed in the interview that you found new or interesting, or that you disagree with, and explain why.

6) Write down three good questions about any of the topics covered in the interview that you would ask Prof King if you had the chance (Note: being able to ask good questions shows that you think about the material at a deeper level. In the real-world, asking good questions is often more important than being able to answer them).

7) Choose ONE of the cartoons below and suggest some funny/interesting text for the bubble that relates to any of the topics discussed in the interview (Note: you can just write the lines in your submission, you do not need to copy the cartoon).

REAL-WORLD POLICY APPLICATION NO 2, BUS5POE

An Exploration of Long-Term Macroeconomic Trends

Macroeconomics deals with many important ‘big picture' topics, and this chapter is devoted to a long-term perspective on macroeconomic outcomes and policies. These have been at the forefront of the interest of economists and policymakers around the globe as they can have an enormous impact on people's prosperity and wellbeing. In this chapter, Professor Paul Frijters from the University of Queensland looks at these topics in an interview with Dr Jan Libich recorded on 19 September 2012 at La Trobe University.
Recipient of the 2009 ‘Best Australian Economists under the Age of 40' award, Prof. Frijters is not an ordinary economist. As suggested by his ever-present hat and the title of his bestselling book, An Economic Theory of Greed, Love, Groups and Networks, Prof. Frijters likes to think outside the box. His self- proclaimed interest ‘in how socioeconomic variables affect the human life experience and the ‘unanswerable' economic mysteries in life' is apparent in his research, ranging from happiness in Russia to migration within China and Indonesia, expectations in East Germany after the fall of communism, and exploring the relationship between macroeconomic conditions and problem drinking in the United States as captured by Google searches.

Based on his wealth of experience advising various Dutch and Australian government bodies, Prof Frijters demonstrates the real-world applicability of economic thinking and argues that macroeconomics ‘is one of those areas in economics where politicians defer to economic expertise'.

IDENTIFYING KEY ISSUES AND SUMMARIZING THE BIG PICTURE

1) Watch the interview at https://youtu.be/jvZpRwTn_94, you can put the subtitles on if you need to. Summarise it in about 5 sentences.

CONNECTING ECONOMIC THEORY TO POLICY

2) Prof. Frijters talks about the limitations of economics and argues that it is not very good at predicting the near-term future. Outline the argument and express your own view.

3) Critics argue that the concept of GDP is flawed and it is not a good indicator of people's wellbeing. What is Prof. Frijters' view on that? What is your own view? Find information on alternative indicators and discuss their relevance.

4) In Prof. Frijters' view, what determines the level of prosperity of a country in the long term? What is your view on this? Attempt to support your arguments with publically available data and attempt to propose some economic policies that you think best promote long-term economic growth and ultimately people's wellbeing.

CRITICAL THINKING & REFLECTION

5) Write down one idea discussed in the interview that you found new or interesting, or that you disagree with, and explain why.

6) Write down three good questions about any of the topics covered in the interview that you would ask Prof Frijters if you had the chance.

7) Choose ONE of the cartoons below and suggest some funny/interesting text for the bubble that relates to any of the topics discussed in the interview (Note: you can just write the lines in your submission, you do not need to copy the cartoon).

REAL-WORLD POLICY APPLICATION NO 3, BUS5POE

ASSESSMENT:

Economists sometimes lament that politicians do not listen to them carefully, and criticise some economic policies as ill-designed or badly implemented. Only a small fraction of economists, however, have the courage (and elbows) to take the matter into their own hands and enter politics.

One such exception is Dr Andrew Leigh, MP. Prior to entering politics, he was an economics Professor at the Australian National University, and recipient of the 2011 ‘Best Australian Economist under the Age of 40' award. Currently he is Member of the Australian House of Representatives (for the Labor Party) and Shadow Minister for Competition. In an interview with Dr Jan Libich on 5 September 2012 at La Trobe University, Dr Leigh uses his expertise in both economics and politics to demonstrate that economic research can be valuable in designing and implementing effective public policies, and hence greatly improve the lives of individuals.

IDENTIFYING KEY ISSUES AND SUMMARIZING THE BIG PICTURE

1) Watch the interview at http://youtu.be/ULm0bpmyy5U, you can put the subtitles on if you need to. Summarise it in about 5 sentences.

CONNECTING ECONOMIC THEORY TO POLICY

2) Summarise Dr Leigh's discussion on ‘school productivity' and explain what the main challenge is for educational policymakers. What were the key findings of his research on teacher quality in Australia? Based on the interview and current research you can find on the internet, suggest some policies that are likely to improve the quality of education - at the primary, secondary and/or tertiary levels.

3) Critically evaluate the following statement: ‘The baby bonus was a well-intentioned and appropriately designed public policy. It is not the government's role to act as a gatekeeper for the negative consequences of people's decisions'. Suggests ways in which the implementation of the baby bonus could have been improved (Note: you can read more on the policy in the textbook's case study "Choosing When the Stork Comes" (pages 8-9 in the 6th edition of the textbook).

4) The composition of the society as well as people's lives have changed considerably since The Beatles released their popular single ‘When I'm Sixty-four' in 1967. Describe the main demographic changes happening in Australia and other high-income countries, and explain the resulting challenges. Propose some policies that could deal these challenges.

5) Dr Leigh finds the debate on the minimum wage ‘enormously frustrating'. Explain why, and summarize the factors that should be taken into account in assessing the pros and cons of the minimum wage legislation. What is your personal view on this policy?

CRITICAL THINKING & REFLECTION

6) Write down one idea discussed in the interview that you found new or interesting, or that you disagree with, and explain why.

7) Write down three good questions about any of the topics covered in the interview that you would ask Dr Leigh if you had the chance.

8) Choose ONE of the cartoons below and suggest some funny/interesting text for the bubble that relates to any of the topics discussed in the interview (Note: you can just write the lines in your submission, you do not need to copy the cartoon).

The goal of these tasks is to analyse the impact of economic theory in government policy. Each of these tasks will present a list of questions, grouped into 3 categories:

- Identifying key issues and summarising the big picture: Watch an interview with an important policy maker and produce a concise summary of key points.

- Connecting economic theory to policy: Respond to questions that require you to relate points discussed in the interview to economic concepts discussed in this subject

- Critical thinking and reflection: React to the interview, ask a question and complete a cartoon.
RWPA Task 1 and 2

- These tasks contain 7 questions worth 1.5 marks each (for a total of 10.5)

RWPA Task 3

- This task contains 8 questions worth 1.5 marks each (for a total of 12)

Please see attachment 2 for the Tasks 1,2,3- questions

RWPA1 - 600 words (September 19th afternoon)
RWPA2 - 600 words (1 week)
RWPA3 - 700 words (2 weeks)

the assessment looks at the quality of your answers, not the quantity. You can be relatively brief, for most of the questions a 100 words' answer will be sufficient (some may require up to 200 words). But make sure you address the gist of the questions and do so by using your own words.

Attachment:- Rwpa.rar