ECO202 Economic Ideas and Models for Business Group-based Assignment July 2025 | SUSS

ECO202 GROUP-BASED ASSIGNMENT

This assignment is worth 20% of the final mark for ECO202 Economic Ideas and Models for Business.

The cut-off date for this assignment is 10 October 2025, 2355hrs.

This is a group-based assignment. You should form a group of 4 members from your seminar group. Each group is required to upload a single report via your respective seminar group site in Canvas. Please elect a group leader. The responsibility of the group leader is to upload the report on behalf of the group.

It is important for each group member to contribute substantially to the final submitted work. All group members are equally responsible for the entire submitted assignment. If you feel that the work distribution is inequitable to either yourself or your group mates, please highlight this to your instructor as soon as possible. Your instructor will then investigate and decide on any action that needs to be taken. It is not necessary for all group members to be awarded the same mark.

Note to Students:  Compose your report using Microsoft Office Word, and save either as .doc or .docx (preferred).  You are to include the following particulars in your submission: Course Code, Title of the GBA, SUSS PI No., Your Name, and Submission Date.

Question 1

(a)  “There is no such thing as an equilibrium price in the market. The price just keeps on changing and never stabilise”. With reference to markets in Singapore, employ suitable economic concepts to explain the validity of the statement. Justify your answers and support your answers with relevant diagrams. (20 marks)

(b)  An economist claimed that to encourage consumption of healthy food, it is more effective to provide a subsidy to the consumers of healthy food compared to impose a price ceiling on healthy food. Analyse the welfare effects of both policies and appraise whether the economist is correct and support your answers with a relevant market diagram of healthy food. You may assume that the subsidy and the price ceiling result in the same price of healthy food paid by consumers. (20 marks)

Question 2

In a tropical economy, there are many sugar cane farmers using the same farming method to plant the same type of sugar cane. It is easy to enter or leave the sugar cane market and information is perfect in the sugar cane market. Many consumers like to drink sugar cane juice and purchase sugar cane from farmers to make sugar cane juice.

(a)  Examine the structure of the sugar cane market. Initially the sugar cane market is at its long run equilibrium. There is new medical research which discovers drinking sugar cane juice is beneficial to the health of the people. As such the government introduces a campaign encouraging people to drink more sugar cane juice. Appraise the short run and long run effect of this campaign on the sugar cane market and a representative sugar cane farmer. Support your answers with suitable sugar cane market and representative sugar cane farmer diagrams. (40 marks)

(b)  An economist advises the government to consolidate the sugar cane market by merging all individual sugar cane farmers into one large sugar cane farmer that sells to the whole economy. Analyse the welfare effects of the sugar cane market if the sugar cane market is consolidated and support your answers with a suitable market diagram. Should the government follow the advice? Discuss.     (20 marks)