Intermediate Business Economics and the Macroeconomy
UPDATED ESSAY NOTES
The essay task is to choose ONE area of economic policy from the list below, regulated by a Singapore government authority as shown. Explain the relevant economics that underlies the area you choose. Summarise and evaluate the arguments for and against intervention by the authority. (2000 words essay)
The areas are as follows, choose ONE:
1) Electricity supply and pricing - authority: Energy Market Authority (EMA)
2) Competition and merger regulation authority: Competition Commission of Singapore (CCS)
3) Environmental protection authority: Natural Environment Agency (NEA)
4) Wage regulation authority: National Wages Council (NWC)(we will be working on wage regulation for this essay, so u can ignore the first three.)
Basic Structure
A structure that highlights the economic issues and solutions (and compromises) discussed in the module is required.Having chosen your area, you might build on
• a situation that has been discussed in the lectures
• a problem you have read about in a newspaper or heard about on the news
• a discussion you find on one of the Singapore authorities' websites
But make sure it contains economic theory relevant to the area you have chosen, e.g.:
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Area
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Economic theories
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Sections in Mankiw-Taylor
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Electricity
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Natural monopoly, utility regulation
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Chap 6 (basic competition), chap14 (economies of scale, natural monopoly, e.g. slide 35)
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Competition
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Monopoly power, cartels, collusion
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Chap 6 (basic competition), chap 14 (monopoly and competition compared, e.g. slide 21), chap 16 (cartels)
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Environment
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Externalities, property rights, prisoner's dilemma
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Chapters 10 (e.g., slide 10) and chap 11 (public goods, externalities)
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Wages
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Wage determination, minimum wages, welfare safety nets
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Chap 17 (labour markets, e.g. slides 38-9), chap 18 (inequality slides 36-7)
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Introduction:
What problem are you analysing? Give the question or hypothesis that is to be your focus. Give a brief overview of the main issues involved. Typical questions or hypotheses in each of the four areas are as follows:
• electricity and the EMA: the EMA has helped to ensure low cost and dependable electricity for Singapore
• competition and the CCS: the Competition Commission successfully promotes competition, as shown by its decision, for example, to stop SITIC's exclusive agreements
• the environment and the NEA: the NEA helps improve air quality in Singapore which is difficult given cross-border haze problems
• wages and the NWC: the NWC's wage "guidelines" provide better employment opportunities than a minimum wage.
Main body:
First, I suggest starting with economic analysis. Explain the relevant economics behind the issues. Taking the four areas in turn we have problems of natural monopoly in the case of electricity supply and the EMA, collusion in the case of the CCS, the tragedy of the commons in the case of Indonesia's fires, and labour market supply and demand and the problem of low wages in the case of the NWC. Start with a simple diagrammatic analysis if possible.
Then, take up the facts and statistics. Explain the reasoning for the authority's policies-go to the authority's website, and discuss why and when it was set up. Discuss its history and achievements, and draw up a table if possible using statistics to demonstrate its achievements. Comparison with other countries is not necessary, but can be useful - the UK for example, has regulation of electricity, and also has a minimum wage.
Conclusion: what have been the advantages and disadvantages of the authorities policies? Try and use specific examples, and relate to supply and demand analysis as taught in the module.
Final word:keep it simple. Use your chosen authority's website for the practical detail of what has happened in Singapore, and use Mankiw-Taylor for the supply and demand foundation. Tell a story about how Singapore's government authorities help solve basic economic problems, using graphs and data.
Requirements
• Clear structure, with Introduction; Main body; Conclusions; References
• Introduction sets out your questions
• Main body: develop your arguments and analysis
- Conclusions - provide a brief summary and discuss implications (if any) for business
- References need to be complete
Writing the essay
• Stick to the word limit
• You are not being judged on the elegance of your English, but your paragraphs must have a structure: beginning, middle and end clear leading sentence, and concluding sentence to each paragraph
• It is good to discuss matters with others in preparing the essay, but write everything yourself
• Leave yourself time to proofread before submitting
Explaining the Economics
• In your essay, you should show that you can understand and apply some of the economics we have covered in this module
• Explain the theory that relates to the case you choose (see following slides)
• You may use diagrams for your explanation (e.g. contrasting competition with monopoly, then showing possible welfare losses)
• Use the economics to analyse different policy measures - i.e. refer back to the theory when discussing policies
Plagiarism
• Make sure you use your own words when writing the essay
• All sources need to be correctly referenced
• Do not copy and paste: this is the best way to avoid plagiarism
• Use direct quotes only when absolutely necessary
• Beware of collusion: working closely with a friend on a similar topic and writing very similar essays
• Your essay will be checked for plagiarism
• Consequences can be significant.
Attachment:- Readings.rar