ECO100 Economics For Business For World Health Organization Essay

Questions:

1. Compare and contrast the rate of cigarette smoking in Australia with your home country and the world average rate.
2. Draw and label fully a supply and demand curve diagram to explain how an excise tax on cigarettes affects:
- demand for cigarettes when demand is inelastic compared with elastic;
- tax revenue for the government,
3. Explain the idea of cost versus benefit when making decisions. Use this idea to analyse as to why:
- the government wishes to reduce the rate of smoking; and
- a smoker as they age should quit smoking.
You will need to support your answer with information through research. Hints: you must acknowledge the source materials appropriately, i.e., referencing.
4. Describe and evaluate the various policies over the years (other than a tax on smoking) that the Australian and State governments have enacted in order to reduce smoking.
5. Compare and contrast the rate of cigarette smoking in Australia with your home country and the world average rate.
6. Draw and label fully a supply and demand curve diagram to explain how an excise tax on cigarettes affects:
- demand for cigarettes when demand is inelastic compared with elastic;
- tax revenue for the government,
7. Explain the idea of cost versus benefit when making decisions. Use this idea to analyse as to why:
- the government wishes to reduce the rate of smoking; and
- a smoker as they age should quit smoking.
You will need to support your answer with information through research. Hints: you must acknowledge the source materials appropriately, i.e., referencing.
8. Describe and evaluate the various policies over the years (other than a tax on smoking) that the Australian and State governments have enacted in order to reduce smoking.

Answers:

1. Cigarette smoking is a behavior which has had uniform impacts across the world and which requires attention in consideration to its impacts on the human health. Some of the similar features of cigarette smoking rates in Australia with my home country (XXX) and the world at large first lie on the most affected age group. According to the current Australian smoking statistics as obtained from Better Health Organization, the most affected group lies between 18-44 years with a margin of 16.3% (Cho, Thrasher, Swayampakala, Yong, McKeever, Hammond & Borland, 2016). These results directly relate to smoking statistics of my home country just as those of the world population. The most affected gender according to Australian Health Organization is the male gender and the same applies to the world statistics as presented by the World Health Organization.

Despite of these similarities, there are also some distinct features of cigarette smoking in Australia with my country and the world at large. For instance, the rates of cigarette smoking among the Australian male gender has been decreasing while that of women increasing. This is contrally to my countries trend and that of the world where the rate of smoking among male gender has been increasing at faster rates than that of female gender. Also, the general cigarette smoking behavior in Australia has indicated to be in a declining phase where people are quitting the behavior at high rates than those getting into it (Hodyl, Grzeskowiak, Stark, Scheil & Clifton, 2014). This trend is different from my country and the whole world because where the rates of smoking are increasing gradually because of the large number of those getting into the behavior compared to those abandoning it.

2. In general, when exercise tax is imposed on cigarette both the supply and demand for the commodity will reduce and drive the market equilibrium to higher prices compared to the case when the tax had not been levied and quantities lower than when the tax had not levied. When tax is imposed on cigarette, the first expectation is that the market prices will increase with a margin similar to the tax imposed from (b-a) according to the above diagram. At price (a), the demand for cigarette will decline as a result of the high prices since consumers are likely to be discouraged from using this commodity because it’s not a commodity they must consume. This however is the case when considering cigarette as an elastic demand commodity (Zoutman, Gavrilova & Hopland, 2018).

According to elastic demand definition, it is when commodity prices or other factors play big roles in determining the quantities of products which consumers want to buy as simplified in the diagram below

However, when cigarette is considered as a must to consume commodity it shifts from an elastic demand commodity to an inelastic demand commodity hence displaying a different demand-supply curve. This is in consideration to the fact that in inelastic demand, the demand of commodities does not increase with increase or decrease in the corresponding rise or decline in their market prices (Feldman & Ruffle, 2015). Such cases are however evident in the cases of must to use commodities like gasoline. So if the cigarettes are taken under the bracket of must to have goods like gasoline, the demand is likely not to be affected by the exercise tax which has direct impacts on the commodity price.

In consideration to the impacts of the imposed exercise duty on cigarettes, the tax revenue which the government was earning will have a direct increment because the two have direct proportional relationship i.e. when exercise tax increases, tax revenue increases also and when exercise tax decreases, the tax revenue as well declines as shown in the diagram below

3. When making decisions in regard to purchasing a commodity or not to purchase it, it has been discovered that the cost of commodity when compared to the benefits expected from it plays a very crucial role in the final decision reached by the buyer (Miura, 2018). For instance in the case of cigarette purchases, when the prices goes extremely high, some smokers will chose not to purchase then in consideration that they are spending highly on something which is likely to cause health problems to them after all. This definitely makes them shy away from purchasing as compared to when the cigarettes are cheap.

So, when government wishes to reduce the smoking rates within the country, it automatically imposes exercise tax on cigarettes translating to increased prices of the product and that definitely cuts off some smokers who are likely to consider the high prices of the commodity and compare them with the benefits of the commodity hence shying away from its purchase (Boadway, 2016). Also, when smokers age should stop smoking because mainly cigarettes are taken as stimulants for purposes of being fruitful in whatever the person is engaged in. At the old age however, activities which need stimulants to be performed are out of the brackets of the person and hence it will be of no benefit to incur the cost of purchasing it when it won’t help in any way.
Describe and evaluate the various policies over the years that the Australian and State governments have enacted in order to reduce smoking.

Plain Packaging

Apart from heavy tax imposition on cigarettes as an approach to control cigarette consumption in Australia, the government has also got into this campaign against cigarette consumption through plain packaging approach (Noar et al, 2016). Through the approach, it was believed that some of the pictures which were initially displayed on the packages were more appealing to the eyes even to an extent of enticing youths to think that they were safe to consume. For instance, images of world celebrities would convince the youths who look up to them that cigarettes are good stuff to consume.

Health Warnings

Also, health warnings have been recently displayed on the package boxes together with scaring pictures taken from the cigarette smoker’s side effects. Some of these pictures include but not limited to discolored teeth, cancerous lungs, throat cancer and others. Through the manner they are drawn, it may easily send signals of change to a person who is almost becoming a victim and change (Purcell, O'Rourke & Rivis, 2015).

Plain packaging avoids the bias which comes with manufacturers drawing some enticing images in the package boxes and which can easily trick youths into starting the smoking habits. Among those enticing images are like the images of celebrities like Rihanna.

This research warns against any form of encouragement in regard to cigarette smoking and advocates for facts to be let in a limelight concerning cigarette smoking impacts. Through that, those who fall in the trap are likely to be the ignorant crew.

4. Unemployment exists in different forms, such forms include: structural, frictional, cyclical, seasonal and disguised unemployment. Each of them is caused by different factors all playing within the country’s economy. Frictional unemployment for instance, it occurs when there is changing demand patterns within an economy hence dislocating the existing patterns of production to an extent of rendering labour redundant (O’Reilly et al, 2015). Structural unemployment on the other hand arises as a result of demand changes which switch production from one kind of work to another. Thirdly, cyclical unemployment arises from business cycles which lead to deficiency of demand or the purchasing power. Seasonal unemployment consequently occurs due to seasonal demand patterns and the seasonal nature of some industries. Lastly, disguised unemployment is due to population growth, land shortage and existence of some social institutions like the joint family systems.

Using information from the captioned article as your guide, use Supply and Demand curves and analyze

- The factors causing changes in the Supply of 15 to 24-year old workers over time.

Increase in education attainment

Young people have increased in their enrolment into full time education programs. This has also increased their demand due to possession of relevant skills required in the market. Through that, their supply has increased. However, on the same note, since most of them are under full time programs, some of the jobs which need full time workers tend not to favour them and hence reducing their supply in the labour market (Zoya & Natasha, 2017).

- The factors causing an increase in demand for 15 to 24-year-old workers.

The demand for young people under the bracket of 15-24 has increased because most of them have begun to enrol into education programs which equip them with the necessary skills required in the labour market. Initially, just a few could have qualifications required hence filtering out those who lacked skills in the labour market (Zoya & Natasha, 2017).

5. The statistics showing that young people in Australia are mainly working as part timers outlined that most of the young people under the bracket of 15-24 years are enrolled in full time education programs whereby only time they can afford in the labour market is during the part time hours when they are off the education program (Zoya & Natasha, 2017) . In addition to education program being factor behind this trend, recent labour demand developments have also played a major role in the trend. For instance, there have been increases in part time employment and a decline in full time jobs. For that matter, young people who are unemployed tend to utilize the chance instead of staying to wait for full time employment.


6. The rate of youth unemployment is approximately 12.5% and which is considerably higher than that of old people. This rate is consistent with the fact that there has been spare capacity in the labour market of Australia over the past few decades (Zoya & Natasha, 2017). Also, employers have been showing some level of reluctance when hiring young people because they are considered to be less experienced and lacking skills. The underemployment rates of young people has also been rising, 20% because of the increased share of 20-24 years old youths who are working part time but not in full time programs of study.

7. Youth unemployment in my home country and the world at large is higher compared to the figures of Australia presented currently. For a fact, Australia is a first world country whose economy has made several steps ahead through the initiation of projects which have absorbed most of their youthful population hence reducing the number of unemployment youths (Zoya & Natasha, 2017). My country being a third world country has not made such advances to reduce unemployment rates just like it is the case with most of world countries. However, Australia shares some common features with my home economy in regard to unemployment rates, most of the unemployed people are youths and this can be attributed to the fact that youths are majority in both economies.

References

Boadway, R. (2016). Cost-benefit analysis. In The Oxford Handbook of Well-Being and Public Policy (p. 1569). Oxford University Press.

Cho, Y. J., Thrasher, J. F., Swayampakala, K., Yong, H. H., McKeever, R., Hammond, D., ... & Borland, R. (2016). Does reactance against cigarette warning labels matter? Warning label responses and downstream smoking cessation amongst adult smokers in Australia, Canada, Mexico and the United States. PLoS One, 11(7), e0159245.

Feldman, N. E., & Ruffle, B. J. (2015). The impact of including, adding, and subtracting a tax on demand. American Economic Journal: Economic Policy, 7(1), 95-118.

Hodyl, N. A., Grzeskowiak, L. E., Stark, M. J., Scheil, W., & Clifton, V. L. (2014). The impact of Aboriginal status, cigarette smoking and smoking cessation on perinatal outcomes in South Australia. Med J Aust, 201(5), 274-278.

Miura, G. (2018). Cost–benefit analysis. Nature chemical biology, 14(10), 903.

Noar, S. M., Francis, D. B., Bridges, C., Sontag, J. M., Ribisl, K. M., & Brewer, N. T. (2016). The impact of strengthening cigarette pack warnings: Systematic review of longitudinal observational studies. Social Science & Medicine, 164, 118-129.

O’Reilly, J., Eichhorst, W., G?bos, A., Hadjivassiliou, K., Lain, D., Leschke, J., ... & Russell, H. (2015). Five characteristics of youth unemployment in Europe: Flexibility, education, migration, family legacies, and EU policy. Sage Open, 5(1), 2158244015574962.

Purcell, K. R., O'Rourke, K., & Rivis, M. (2015). Tobacco control approaches and inequity— how far have we come and where are we going?. Health promotion international, 30(suppl_2), ii89-ii101.

Zoutman, F. T., Gavrilova, E., & Hopland, A. O. (2018). Estimating Both Supply and Demand Elasticities Using Variation in a Single Tax Rate. Econometrica, 86(2), 763-771.

Zoya Dhillon& Natasha Cassidy (2017). Labour Market Outcomes for Younger People. Retrieved from: market-outcomes-for-younger-people.pdf

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