Please read the article below by ABC journalist Ashley Hall dated 29 th April 2010 Cigarette tax hike sparks panic buying and identify TWO (2) economic issues you found interesting.

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Discussions 1:

The following guidelines will underpin your contributions:-

• demonstrate your knowledge of the topic in relation to relevant economic theories/concepts

• Effectively convey your thoughts, opinions and ideas

• provide evidence of relevant further readings, especially from academic journals –Economists magazine

• incorporate your own work and personal experience, and

• adhere to the minimum contribution guidelines presented below

Minimum/Maximum Contribution Guidelines

Prior to the discussion opening,

• read the relevant chapters in your text book

• Research the topic through further reading of relevant academic journal articles

• look for examples of its practical application.

Look at the questions that are being asked, make an informed judgment about what would constitute a reasonable answer, and then make your entry.

Quality is important and is one of the criteria that is being used to assess your contribution. Long rambling entries are discouraged. BE SUCCINCT. Your initial comments are a short, sharp synopsis (aim for about 400 words) of your research and your views/thoughts on that research as they relate to the topic.

Please read the article below by ABC journalist Ashley Hall dated 29 th April 2010  and identify TWO (2) economic issues you found interesting.

Through the discussion board forum explain the significance of these issues (with reference to theory of course!).

Having identified two issues join the discussion forum and make at least TWO (2) meaningful reflections on the contributions of others. You are encouraged to include relevant diagrams in your various discussions.

Module info from lecturer:

(i) Discussion 1: Discussion Topic 1 opens today (23rd May). You need to complete your initial discussion for this topic by 29th May. You don’t need to be writing a lot for the initial discussion (i.e. no more than about 400 words).  You may wish to back up your claims with references or just draw on your personal experiences. The discussion topic related to the taxing of cigarettes. There are a lot of issues that you could look at in the topic. You can draw on your knowledge from Module 1 and 2 and look at things like demand and supply, the price elasticity of demand (cigarettes generally have a price elasticity of demand which is inelastic), price regulations and the burden of a tax. You may also want to extend your discussion to issues not covered yet in the unit such as externalities. Once you have completed your initial discussion for Discussion 1 you can read other students’ discussion. You need to reply to two students’ discussions in the following week. If you have any questions regarding the discussion please contact me. To access the discussion you need to do so via the my groups page in blackboard.

4.       Discussion 1 will open on 23rd May. The topic’s question will be released to students on blackboard on the day the discussion opens. I will give you some tips in next week’s newsletter. The first discussion is based on taxing cigarettes. You will need to answer the Discussion via the my groups pages in blackboard. This is because we have allocated students into smaller groups as the class is rather larger. There are about 11 students in each group.

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In the article Cigarette tax height spikes panic buying (Hall 2010); the following two economic issues were of interest to me.

-The demand changes on cigarettes with the upcoming policy to increase taxes by 25%.

Generally the price elasticity of demand for cigarettes is inelastic3. However with the tax burden on buyers and sellers, the price of cigarettes will increase and demands will decrease2.  With the dependency on tobacco-delivered nicotine in cigarettes, the impact of demand for cigarettes after a price rise would vary upon individuals as mentioned in the article1.

I would expect the increase in ...

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