MAE101 – Economic Principles – Trimester 1 2025
Assessment Task 1 (Individual)
DUE DATE:
Sunday 27 April 8:00 pm AEST (Melbourne Time) 2024
PERCENTAGE OF FINAL GRADE:
30%
WORD COUNT:
2000 words (Strict limit)
Description
Please respond to all questions of this individual assignment. Some questions have multiple
parts. You do not need to include the questions in your responses. However, it should be clear
which question you are responding to.
You are required to use knowledge from Topics 1 to 5 (microeconomics). Please use graphs to
answer the question when you see [graph]. You can still use graphs for questions that do not
have [graph], but you do not lose marks for not using them in those questions. You have two
options for graphs:
1) Hand-drawn drawing(s): Use your smartphone to take a clear photo of your hand-drawn
drawing(s) and digitally insert it into your answer document at the relevant position.
2) Digitally created drawing(s) – Save the image to your computer and then use the ‘Insert
Image’ function to upload the image. You must have created the digital drawing yourself. Do
not use existing (‘stock’) images from the internet.
As this is what you will be required to do for the exam, it is good practice to do it now when
you are not labouring under the time constraints of the exam.
You only need to provide references if you cite materials from outside the unit. You do not need
to consult external sources to complete this assignment, though they may help. You are not
required to refer to data or findings from research studies to answer the questions in this
assignment. Emphasis is placed on conceptual and analytical understanding and application.
Hence, be precise and concise in your answers. Further, I also acknowledge Dr. Aaron
Nicholas for his efforts in creating the assignment, which I have subsequently modified.
___________________________________________________________________________
Read the article below (adapted from The Conversation, June 10, 2021, by Gary Sacks
https://theconversation.com/how-much-longer-do-we-need-to-wait-for-australia-to-implementasugary-drinks-tax-162434)
Note that the article is meant to set the context for which most of the questions in the assignment
are based on. However, this does not mean the article contains the answers to the questions.
Instead, you are expected to utilise your economic reasoning learnt from the unit.
___________________________
The Australian Medical Association (AMA) has once again called for a tax on sugary drinks in
Australia. This time, the proposed tax is a key part of the AMA’s blueprint to make Australia
the healthiest country in the world.
The strong call for a sugary drinks tax echoes the concerted campaign by 2020 Australian of
the Year, Dr James Muecke.
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And it follows years of advocacy from public health groups and think tanks that have
longargued the many potential benefits of a sugary drinks tax for Australia.
What does the evidence say?
A sugary drinks tax is consistently identified as a critical part of efforts to improve our diets
and prevent obesity.
There is strong evidence linking sugary drink consumption to a range of negative health effects
including tooth decay, excess weight gain, and increased risk of developing obesity and type 2
diabetes.
International evidence clearly shows sugary drinks taxes are effective in reducing consumption
of the taxed products.
Available evaluations have also consistently shown taxes on sugary drinks lead to increases in
purchases of untaxed drinks, particularly bottled water. These effects have been shown to
persist over many years.
What tax design works best?
The AMA proposes Australia implement a tax of A$0.40 per 100 grams of sugar (per unit of
product). Under the proposed tax rate, the amount of tax paid on a 375ml can of Coke with 40g
sugar (sugar content is 10.6g/100ml) would be A$0.16.
This tax rate is consistent with global recommendations that price increases of at least 20% are
needed to have a meaningful health effect.
The proposed AMA tax design is also in line with international evidence that shows sugary
drink taxes work best when the tax rate is based on sugar content.
These taxes can incentivise people to switch to healthier (lower sugar) substitutes while
simultaneously incentivising manufacturers to reformulate their products (lowering the sugar
content) to avoid a higher tax rate.
For example, the UK has documented success with a tiered approach, whereby products with
sugar content above particular thresholds attract high tax rates. The UK tax has led to decreases
in consumption and impressive levels of reformulation.
The products to be taxed under the AMA proposal include all non-alcoholic drinks containing
free sugars, but exclude 100% fruit juice, milk-based and cordial drinks.
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Given the international and Australian evidence of the fierce opposition to sugary drinks taxes
from the food industry, practical decisions such as this are likely to help reduce resistance to
the tax (from fruit growers, for example, and the dairy industry).
Impact of a sugary drinks tax in Australia
The AMA estimates the proposed tax would lead to reduced sugar consumption, improved diets
and a 2% reduction in obesity.
Over a 25-year period, modelling has shown this would result in 16,000 fewer cases of type 2
diabetes, 4,400 fewer cases of heart disease, 1,100 fewer cases of stroke, and 1,600 fewer
deaths.
These health benefits would translate to health-care expenditure savings of between A$609
million and A$1.73 billion.
The AMA estimates the tax would raise government revenue of around A$800 million each
year. This revenue could be earmarked for preventive health initiatives.
___________________________
(1a) [graph] The article states: “International evidence clearly shows sugary drinks taxes are
effective in reducing consumption of the taxed products.” Using the concept of price elasticity
of demand, show on a graph (and discuss) what a sugary drink tax that has no effect on
consumption would look like.
[5 marks]
(1b) Using the graph you drew in question (1a), describe the main effects of the tax on welfare
(i.e. surplus’)?
[3 marks]
(1c) Do you think the actual price elasticity of demand for sugary drinks is elastic or inelastic?
Provide arguments for both possibilities.
[3 marks]
(2)
[graph] The article states: “Available evaluations have also consistently shown taxes
on sugary drinks lead to increases in purchases of untaxed drinks, particularly bottled water.”
Using graphs for the market for sugary drinks, and the market for an untaxed drink (e.g. bottled
water), show the effects of a sugary drinks tax on the price and quantity traded in the untaxed
drink market.
[5 marks]
(3)
Imagine a sugary drinks tax already exists. The government then increases the tax with
the intent to raise tax revenue. In which scenario will they do so more successfully – when the
price elasticity of demand is elastic or inelastic? Assume the price elasticity of supply is the
same across both scenarios.
[3 marks]
(4a) What is the problem being addressed by a sugary drinks tax? State the problem in terms of
the concept of ‘externalities’, ensuring you explain the link between this concept and sugary
drinks. Explain how the tax is able to address the problem.
[3 marks]
(4b) [graph] Depict on a graph a perfectly competitive market with the externality you
discussed in (4a). Utilise the graph to clearly highlight and discuss the problems associated
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with this externality. [hint: focus on the quantity difference between the market equilibrium and
the socially desirable equilibrium]
Now consider what happens if the market consolidates and becomes a monopoly (there is no
need to depict this on the graph). Do you think the externality problem you previously
highlighted will increase or decrease? [hint: focus on the quantity difference between a
monopoly and perfectly competitive market]
[5 marks]
Learning by Doing: Taste How to Do Data Analysis with Economics (3 Marks)
The dataset provided contains information on excise duty (considered as a tax) per
stick and the number of crimes related to illicit tobacco (reported by media) from 2006 to
2025.1
Year
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Excise duty (considered as a
tax) per stick of cigarette
0.235495
0.24187
0.24988
0.25756
0.30754
0.341936667
0.347503333
0.367055
0.424416667
0.480776
0.550698
0.63218
0.727444
0.839408
0.97781
1.10669
1.129624286
1.17535904
1.288812
1.384675
Number of crimes
related to illicit
tobacco (reported by
media)
5
17
13
9
1
3
2
6
12
18
5
20
46
27
42
30
27
43
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Important Note: This dataset is independently provided for analysis and is not taken from
the article A Content Analysis of Illicit Tobacco-Related Crimes Reported in Australian
Media (Nicotine and Tobacco Research, 2024). The article is referenced only for discussion
purposes in Part 3.
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Using SPSS, analyse the data by completing the following tasks:2
Part 1: Data Entry and Descriptive Statistics (1 Mark)



Enter the dataset correctly into SPSS, ensuring proper variable labels.
Generate descriptive statistics (mean, median, standard deviation, and range) for both
variables.
Create a line chart to visualize trends in excise duty and reported illicit tobacco crimes over
the years.
Part 2: Correlation Analysis (1 Mark)


Conduct a Pearson correlation test to analyse the relationship between excise duty per stick
and the number of illicit tobacco-related crimes reported by the media.
Report the correlation coefficient (r) and p-value and determine if the relationship is
significant.
Part 3: Interpretation and Discussion (1 Mark)



Interpret the correlation result: Does an increase in excise duty appear to be associated with
an increase or decrease in illicit tobacco-related crimes?
Compare your findings with key points from the article A Content Analysis of Illicit TobaccoRelated Crimes Reported in Australian Media (Nicotine and Tobacco Research, 2024).
Discuss whether the trends in the dataset align with the broader themes or concerns
discussed in the article (e.g., how policy changes affect illicit trade).
___________________________________________________________________________
Submission
You are to submit your assignment in the individual Assignment Dropbox in the MAE101 CloudDeakin
unit site on or before the due date. Go to →Assessment→Assignments→Assessment Task 1. You can
submit either a Microsoft Word document or a .pdf document. However, we recommend submitting
.pdf document since images and shapes may not align in Microsoft Word. If you submit both, ensure
you submit them simultaneously, as submitting a new file automatically overwrites any previous
submission.
You must submit your assignment in the Assignment Dropbox in the unit CloudDeakin site on or before
the due date. When uploading your assignment, name your document using the following syntax: <your
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All Deakin students have access to IBM SPSS Statistics, for more detail click the following link:
https://software.deakin.edu.au/2022/11/29/ibm-spss-statistics-and-amos-for-students/
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surname_your first name_your Deakin student ID number_MAE101.doc (or ‘.docx’). For
example, ‘Jones_Barry_123456789_MAE101.doc’.
You must keep a backup copy of every assignment you submit until the marked assignment has been
returned to you. In the unlikely event that one of your assignments is misplaced you will need to submit
your backup copy.
Any work you submit may be checked by electronic or other means for the purposes of detecting
collusion and/or plagiarism and for authenticating work.
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assignment in the Submissions view of the Assignment Dropbox folder after upload and check for, and
keep, the email receipt for the submission.
Marking and feedback
The marking rubric indicates the assessment criteria for this task. It is available in the CloudDeakin unit
site in the Assessment folder, under Assessment Resources. Criteria act as a boundary around the task
and help broadly specify what assessors are looking for in your submission. Ensure you understand the
assessment description and questions in this document in detail prior to looking at the marking rubric.
Students who submit their work by the due date will receive their marks and feedback on CloudDeakin
15 working days after the submission date.
Extensions
Extensions can only be granted for exceptional and/or unavoidable circumstances outside of your
control. Requests for extensions must be made by 12 noon on the submission date using the online
Extension Request form under the Assessment tab on the unit CloudDeakin site. All requests for
extensions should be supported by appropriate evidence (e.g., a medical certificate in the case of ill
health).
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Applications for extensions after 12 noon on the submission date require University level special
consideration and these applications must be must be submitted via StudentConnect in your
DeakinSync site.
Late submission penalties
If you submit an assessment task after the due date without an approved extension or special
consideration, 5% will be deducted from the available marks for each day after the due date up to
seven days*. Work submitted more than seven days after the due date will not be marked and will
receive 0% for the task. The Unit Chair may refuse to accept a late submission where it is unreasonable
or impracticable to assess the task after the due date. *'Day' means calendar day for electronic
submissions and working day for paper submissions.
An example of how the calculation of the late penalty based on an assignment being due on a Thursday
at 8:00pm is as follows:
• 1 day late: submitted after Thursday 11:59pm and before Friday 11:59pm– 5% penalty.
• 2 days late: submitted after Friday 11:59pm and before Saturday 11:59pm – 10% penalty.
• 3 days late: submitted after Saturday 11:59pm and before Sunday 11:59pm – 15% penalty.
• 4 days late: submitted after Sunday 11:59pm and before Monday 11:59pm – 20% penalty.
• 5 days late: submitted after Monday 11:59pm and before Tuesday 11:59pm – 25% penalty.
• 6 days late: submitted after Tuesday 11:59pm and before Wednesday 11:59pm – 30% penalty.
• 7 days late: submitted after Wednesday 11:59pm and before Thursday 11:59pm – 35% penalty.
The Dropbox closes the Thursday after 11:59pm AEST/AEDT time.
Learning Outcomes
This task allows you to demonstrate your achievement towards the Unit Learning Outcomes (ULOs)
which have been aligned to the Deakin Graduate Learning Outcomes (GLOs). Deakin GLOs describe the
knowledge and capabilities graduates acquire and can demonstrate on completion of their course. This
assessment task is an important tool in determining your achievement of the ULOs. If you do not
demonstrate achievement of the ULOs you will not be successful in this unit. You are advised to
familiarise yourself with these ULOs and GLOs as they will inform you on what you are expected to
demonstrate for successful completion of this unit.
The learning outcomes that are aligned to this assessment task are:
Unit Learning Outcomes (ULOs)
Graduate Learning Outcomes (GLOs)
ULO 1
Describe and interpret key microeconomic and
macroeconomic concepts and tools, including
graphs and basic algebra.
GLO1: Discipline-specific knowledge and capabilities:
appropriate to the level of study related to a discipline or
profession.
ULO 2
Apply key microeconomic and macroeconomic
concepts and tools to economic questions.
ULO 3
Obtain and analyse data and/or information related
to a real-world issue.
GLO4: Critical thinking: evaluating information using critical
and analytical thinking and judgment.
ULO 4
Critique approaches to economic issues in a global
and multiple-perspective context.
GLO8: Global citizenship: engaging ethically and productively
in the professional context and with diverse communities and
cultures in a global context.
GLO3: Digital literacy: using technologies to find, use and
disseminate information.
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Support
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Referencing and Academic Integrity
Deakin takes academic integrity very seriously. It is important that you (and if a group task, your group)
complete your own work in every assessment task Any material used in this assignment that is not
your original work must be acknowledged as such and appropriately referenced. You can find
information about referencing (and avoiding breaching academic integrity) and other study support
resources at the following website: http://www.deakin.edu.au/students/study-support
Your rights and responsibilities as a student
As a student you have both rights and responsibilities. Please refer to the document Your rights and
responsibilities as a student in the Unit Guide & Information section in the Content area in the
CloudDeakin unit site.
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