TMA 04 The assignment

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Important: These pages provide guidance on how to write your assignment. Please ensure you read all of this information right through until the checklist at the end.

Before you start work on this assignment, please ensure that you have read the Assessment Guidance specific to this module and are familiar with the advice in  Social Sciences Assessment Information. These sources contain support and guidance that you may need in writing your TMA including, for example, advice on plagiarism,  referencing and the  marking system. Note that failure to comply with relevant guidance could result in the loss of marks or other penalties.

There are two parts to this TMA. Answer Part A and Part B, noting the word limits. On the following pages you will find guidance on how to complete each of the different parts of this assignment.

Part A (80% of the marks)

Answer one question from the four listed below, noting the word limit.

Question  1 – Environmental economics

What are some of the key economic issues in the development and implementation of policies designed to mitigate climate change? Discuss your answer in full, drawing particularly on the extract ‘Ottawa seeks to set national minimum on carbon pricing’ (which you can find in ‘Assessment resources’)

as well as on economic theory and/or analysis from the module.

  

Question  2 – Economics and society

Is UK government policy that requires gender pay-gaps to be reported by companies likely to have an impact on the distribution of earnings or utility between men and women? Discuss your answer in full, drawing on the extract

‘Five steps to prepare for gender gap reporting’ (which you can find in ‘Assessment resources’) as well as on economic theory and/or analysis from the module.

Question  3 – Business and innovation

To what extent does planned UK regulation of higher education draw on insights from neo-classical and evolutionary approaches? Do you think that markets for higher education in the UK need regulation in addition to competition for students?

Discuss your answer in full, drawing on pp. 2−6 of the extract ‘An effective regulatory framework for higher education: A policy paper’ (which you can find in ‘Assessment resources’) as well as on economic theory and/or analysis from the module.

Question  4 – Finance

How do financial markets provide liquidity to companies, and how are post- crisis regulations affecting this ability? Discuss your answer in full, drawing on pp. 7−13 of the extract ‘Global financial markets liquidity study’ (which you can find in ‘Assessment resources’) as well as on economic theory and/or analysis from the module.

Word limit:  1500 words

 

Part B (20% of the marks)

Sketch a short project proposal that includes the following elements:

1. Your research topic and a focused research question.
2. Explain which economic theory from this module is relevant to your research question and why. Also, specify the module materials (section of a book chapter or online activity) that cover the theory you have chosen.
3. Identify at least two references outside the study materials that inform your research project, and briefly explain why they are relevant to your research question.

Word limit:  500 words

In the following pages, you will find:

• learning outcomes addressed by this assignment
• student notes for each part of this assignment
• a checklist to ensure you have done everything required for this assignment.

Learning  outcomes

This assignment gives you the opportunity to demonstrate the following learning outcomes:

Knowledge and understanding

You should demonstrate a sound knowledge and understanding of:

• the microeconomic theory of production, consumption and exchange at post-introductory level with applications
• the main features, strengths and weaknesses of standard neoclassical microeconomic theory and alternative theoretical approaches
• key ideas, theories and debates in microeconomic theory with applications to current issues in various areas, such as consumption, households, production, firms, exchange, policy, environment, finance and labour.

  

Cognitive skills

You should demonstrate the ability to:

• define and use key terms and concepts in economics
• construct effective arguments in analysing economic questions
• apply economic theories and models to analyse economic problems and events
• evaluate economic statements and theories
• use diagrams with verbal explanations of economic issues
• interpret qualitative and quantitative evidence, such as case studies and articles, and the results of regression analysis.

Key skills

Communication

You should demonstrate the ability to:

• communicate effectively complex information and arguments in writing, using appropriate academic conventions
• reference sources following appropriate academic conventions.

Use of numbers

You should demonstrate the ability to:

• use diagrams to analyse economic issues.

IT

You should demonstrate the ability to:

• use software packages to carry out statistical analysis.

Practical  and/or professional skills

You should demonstrate the ability to:

• evaluate competing explanations and theories in relation to evidence
• analyse economic problems and issues.

Student notes Part A Question  1

The question invites you to use economic analysis to understand issues around carbon pricing as a mechanism for reducing the negative externalities associated with climate change. The cap and trade policy to be introduced in Canada is discussed particularly in Sections 2 and 3 of Chapter 13. Other sections of the module that relevant to environmental issues include Chapter

11 on environmental valuation and Chapter 12 on social discounting and intergenerational justice. Chapter 9 on welfare economics and social choice, and Chapter 8 provide some background about government provision and market failure. The extract provides an opportunity to explain why there might need to be a price for carbon, what a cap and trade scheme is, and its economic justification. There is also an opportunity to discuss why the central government might need to impose a minimum price for carbon on all the provinces. In this regard, the analyses of Section 4 in Chapter 13, for example, might be helpful. The extract reports that provinces have led the introduction of carbon pricing, but at different rates, and you might wish to consider what the economic reasons for this pattern of adoption have been and whether there are parallels with the negotiation of international agreements to mitigate climate change. Finally, you might consider why the federal government is reported as having little appetite for raising fuel taxes

and transferring funds to the provincial governments, particularly in the light of the analysis presented in Chapter 10.

Question  2

The question provides you with an opportunity to use economic analysis to consider the possible implications of pay reporting by gender on the distribution of earnings and utility. The basic premise of the policy might be

explored using ideas of production efficiency in Chapter 5. Equal pay for equal work is compatible with different total earnings between genders for a variety of reasons, as the extract indicates, but there are, potentially, other factors to do with individual decision-making over the life course and within households. You may wish to work through, for example, the possible implications of more effective equal work for equal pay policies on utility by using different models of household decision-making, particularly those discussed in Chapter 4, Sections 4 and 5. If pay by gender reporting does have a positive impact on the wage rates of female workers, its implications on utility within households may depend on the model of household decision-making used. The issue is covered particularly in Section 5 of Chapter 4. There is also a considerable amount of relevant material in Chapter 15 on wage determination,

discrimination and segmentation in labour markets. You may wish to consider, for example, the extent to which gender-based pay differences are linked to segmented labour and the degree to which gender pay reporting is likely to impact on such differences.

Question  3

The question provides an opportunity to evaluate proposals for the regulation of higher education in terms of the two different theories discussed in the module. The extract highlights a number of changes to higher-education in recent years and proposes that the regulatory framework should be focused around the fact that higher education institutions now compete extensively for students. The neo-classical approach to innovation is discussed extensively in Sections 2 to 4 of Chapter 5. In addition, the evolutionary approach articulated by Schumpeter is discussed in Section 5. The extract makes a number of points about the nature of competition in higher education and describes proposed changes to the regulatory regime in response. These recommendations derive ultimately from economic theories of competition and the question invites you comment on the points and recommendations and to argue the extent to which they draw on neo-classical and/or evolutionary insights.

The second part of the question invites you to provide a view about the need for regulation, given the rise of competition for students. You should argue for the position you adopt based on economic analysis from the module and the extract. To answer this part of the question you might also wish to draw on some of the material concerning market failures that appears in Chapter 8, particularly Sections 7 and 8.

Question  4

The question provides an opportunity to describe the provision of liquidity to firms by financial markets as developed in the analysis from the module. In addition, it allows you to draw on a post-2008 crisis report about the consequences of more stringent regulation on the operation of financial markets and to comment on the extent to which there might be a trade-off between the avoidance of financial disasters and the availability of liquidity to companies.

You should describe the basic equilibrating mechanisms for finance that allow savings and borrowing to be matched, and there is significant material on this in Chapter 20 on the micro-economics of capital markets, particularly in Section 3. You may also wish to consider some of the criticisms that have been made with the equilibrium account.

   

The financial crisis of 2008 provided an example of a situation described in the extract as one in which there was a rapid growth of instruments for which there was little understanding of the underlying risks. You may wish to draw on the capital asset pricing model discussed in Section 3 of Chapter 21 to discuss risk pricing and the importance of understanding the nature of the risks being traded.

You should use the extract to identify changes that may be hindering or helping financial markets in their fundamental operations and you can also discuss any proposals to address difficulties.

Part B

Part B constitutes the start of your work towards the final project, your end-of- module assessment (EMA). We want you to start working towards your detailed research plan, which you will have to prepare for TMA 05, by identifying a possible research question that you want to explore in your project and a couple of useful references from a source outside the study materials.

Please note that this is just a starting point for your research and you are not tied down to exploring the research question you choose for this TMA question. Doing research sometimes involves revising your plan as you learn more about your project, and you will be able to adapt, or even change, your research topic and question while you study Block 5. So, while your final project might evolve into something quite different, it is important that you start your search for a research question now.

Reflections on the assignment (not marked)

The purpose of this section is to enhance the dialogue you have with your tutor. You will receive better feedback and guidance if your tutor is well informed about your experience with the course materials. Here are some prompts that will help your dialogue about this TMA:

• Look back at the feedback you received for your previous assignments. What advice was particularly useful? What other advice or type of support would have helped you further?
• What were the main challenges you encountered while working on the questions in the two parts of the TMA?
• Did you find any part of the TMA or any aspect of your chosen research method particularly difficult?
• To what extent did you overcome the challenges you met?
• What helped you to overcome the challenges, and what other support could have helped you?

 A Guide to Understanding and. Carrying Out Economic Research

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