A 3000-word microeconomics essay.
Essay topic: Suppose you are an advisor for an industry which is facing a significant change in technology involving either a superior product or a lower cost method of production. Choose an industry and the technology change of interest to you. As an advisor, you are required to prepare a model to assess the direction of effects of the new technology, and to set out the key information required in a future study to quantify the magnitudes of the likely changes.
Your essay should include the following:
(i) An economic model appropriate for your industry to describe the firm and industry, and its decisions and outcomes, in its present state before the technology change. This is the base case. (about 10 of the 30 marks)
(ii) Describe the technology change and its first round effects on the firm decision problem and choice options. (about 5 of the 30 marks)
(iii) Use the model of (i) to explain the likely directions of effects of the new technology described in (ii) on firm and industry decisions and other outcomes of interest to the industry. (about 10 of the 30 marks)
(iv) List the key data and other information you would collect in a future quantitative report to apply your model to estimate the magnitudes of effects of the new technology. Indicate where you might find the required information for the next stage of the consultant study. (about 5 of 30 marks)
