Economics for Business: Unemployment and Tobacco Control Measures in Australia

This article discusses the causes and types of unemployment, the impact of tobacco control measures in Australia, and the labour market outcomes for young people. It also explores the effects of plain packaging and the global youth unemployment rate.

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Economics for business
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Answer 1
The smoking rate of Australia who are of above eighteen years and over was around
12.8% in 2016. It has been found out that cigarettes are smoked by over more than one billion
people which includes over twenty percent of the total world population where more than
eight hundred million smokers comprises of men only.
Answer 2:
The above diagram states that when the demand is more inelastic the consumers bear
most of the tax burden. In the case of smoking, as the consumers are addicted to it, the
demand for cigarettes will be inelastic. The tax burden can be then passed on to the
consumers in the form of high prices without a decline in the equilibrium quantity.

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The above diagram shows that there is a presence of elastic demand and the supply
curve here is more inelastic which states sellers bear most of the tax burden. The tax burden
in this case is therefore, will be more on sellers. By introducing an excise tax the government
mainly creates a wedge between the price paid by the consumer and also on the price is
received by the producers.
Answer 3
A cost benefit analysis is a method where the business use to analyse decisions. It is
process which involves adding up the benefits of a course of action and then comparing the
costs related to it.
The Australian governments have worked a lot in order to reduce the consumption of
tobacco. The government have also planned to increase the rate of tax on cigarettes as it will
lead to fall in demand. As cigarettes are termed as demerit goods, consumers may
underestimate the costs of smoking. Smoking also consists of many negative externality,
where the social cost is greater than the private cost. It is advisable for a smoker to quit
smoking as thy age. The reason behind this is that smokers who have aged a lot will face

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serious health problems. People who smoke at a higher rate will have a lung infection and
then also will lead to cancer.
Answer4
Some of the laws made by the Australian governments in order to reduce smoking are
the Federal laws include mandatory plain packaging of cigarettes in Australia. Tobacco
advertising had also been made illegal. Smoking is not allowed in Queensland in all enclosed
public places. Smoking in car with a presence of a child had also been made illegal. In the
year 2012, the cigarettes packets sold in Australia have been confined to a green colour with
no corporate branding along with seventy five percent of the font displaying a graphic health
sign. A strong penalty have also been put for tobacco smuggling offences. In the year 2003,
there was introduction of Tobacco Advertising Prohibition Act.
Answer i
The main purpose of plain packaging of cigarettes was to discourage people from
smoking or encourage people to give up smoking. The plain packaging will reduce people’s
exposure to smoke tobacco products. Plain packaging is a key part of Australia package of
tobacco control measures. The measure of plain packaging of all tobacco products had been
implemented from December 2012. The objectives of the act of plain packaging of all the
tobacco products in 0rder to reduce the appeal of tobacco products to consumers along with
rise in effectiveness of any kind of health warnings on the retail packaging of the products. It
will also decline the ability of the retail packaging of the tobacco products which often
misleads consumers about the harmful effects of smoking.
Answer ii\
The mentioned article states how the Australian tobacco market is hugely regulated. It
states the means by which the governments sought to reduce the consumption of tobacco

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through various kind s of regulation. Reducing the consumption of tobacco have been a
significant goal for the governments. Australia had been the first country in the world in order
to regulate how the packaging of cigar rate should appear. With the information available in
the report, the article failed to find proper evidence which suggests that whether the plain
packaging had any impact on the consumption behaviour. The polices which have been stated
in the article had no discernible impact. The impact was much weaker than expected and the
policy also showed a negative impact sometimes.

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Essay 2
Answer 1
Unemployment can be termed a situation where people of working age is not been
able to find a job, however would like to be in full time employment. It represents the total
number of people staying in the work force, who is at presently out of work but do not have a
job. Unemployment is generally calculated by dividing the total member of people who are
actually unemployed by the total work force. The causes behind
Structural unemployment – structural unemployment takes place when there is fall in
demand for production in a particular industry which leads to declination of manpower
requirements. Technological advances in any industry also leads to structural unemployment.
Cyclical unemployment- this type of unemployment takes place when the workers lose their
jobs as a downturn of business cycle.it also results due to large drop off demand.
Hidden unemployment- when unemployment of the workers is not reflected in official
statistics is termed as hidden unemployment. People who does not utilize their skills properly
and given up looking for a job are termed as hidden unemployment.
Frictional unemployment- it takes place when there are presence of jobless workers who are
looking to work in a healthy economy.
Underemployment- it results when the supply of workers exceeds the demand of the
workers and also there may be presence of technological change.
Answer 2
The shift in the demand curve for labour takes place due to various reasons. It have
been found out that the labour market outcomes have changed a lot in the recent years. The
major reason behind the decrease in the supply of 15-24 age workers is that most of them are

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availing for the part time job instead of full time job as they have already enrolled for higher
education. The decrease in the supply of 15-24 year age groups in the labour force
participation rate is related to rise in the share of 15-24 year olds studying full time. The rapid
changes which is present in the labour force is driven by growth in the numbers as well as
changes in the labour force participation rate. The increase in educational attainment over the
recent years and a rise in supply of younger migrant are the main reasons behind the labour
supply developments.
Answer 3
The article mentioned states that most of the 15-24 age group work as part time rather
than the full time. The main reason behind this is that majority of the 20-24 year olds have
enrolled in the full time education which does not allow them to work full time. As they are
have already enrolled for the full time education, most of them therefore, works part time.
The rise in attainment of education is also associated with decrease in hours worked by
younger people which leads to rise in the prevalence of the part time work. Increase in
educational attainment is therefore related to decline in the full time opportunities for
younger people since, when the probability of finding work is perceived to be low, the young
people will more likely prefer to continue with their education. This also in someway or the
other increased the unemployment rate for younger people. Some of the main reasons of
working part time includes studying, incapable of finding full time job, personal or family
reasons.
Answer 4
The monthly trend of unemployment rate had been 5.5% since the month of February,
2018. The underemployment rate in the month of March decreased by 0.1 percentage
points to 8.3 percent. This particular rate of underemployment had been the lowest the
year 2015. Over the last year the underutilisation rate of both underemployment and

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unemployment went down by 0.6 percentage points to 13.8 per cent. According to the
research made by The Guardian it had been found out that underemployment had
been 18%which has hit the highest since the last 40 years. The jobless rate rises to
13.5%. It has been found out that the one third of the Australian are unemployed or
the underemployed. The mismatch between the supply and demand in the labour
market takes place because of technological change and skills mismatch.
Answer 5
The global rate of youth unemployment rate in Australia was found to be 12.9% the
unemployment rate of the younger people in Australia have been found to be around twelve
and a half percent which is little higher than the countries of OECD. The difference leads to
rise in economic conditions slow down. The labour market outcomes in Australia have also
changed a lot significantly.

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