University Economics: Semester 3, MB113 Reflective Journal

This reflective journal provides an in-depth analysis of various microeconomic and macroeconomic concepts. The student explores topics such as demand and supply in the context of the Australian seed restoration industry, the impact of monopoly power in the electricity supply sector, and the dyna...Read More

Running head: REFLECTIVE JOURNAL
Reflective Journal
Name of the Student
Name of the University
Author note

1REFLECTIVE JOURNAL
Table of Contents
Article on demand, supply and microeconomics.............................................................................2
Article on monopoly........................................................................................................................2
Article on oligopoly.........................................................................................................................3
Article on public goods and externalities........................................................................................4
Article on cost concept....................................................................................................................5
Article on GDP................................................................................................................................6
Article on monetary policy..............................................................................................................7
Article on fiscal policy.....................................................................................................................8
Article on foreign exchange.............................................................................................................9
Article on elasticity........................................................................................................................10
References......................................................................................................................................12

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Article on demand, supply and microeconomics
https://onlinelibrary.wiley.com/doi/abs/10.1111/emr.12148
The article is based on the issues of demand and supply in restoration in Australia. It is
related to future of seed in Australia. It is one of the significant factor for the vegetation system.
Thus, the issues faced by the Australia related to seed can be analysed on the basis of this article.
The article deals with the factors of the microeconomics such as demand and supply. The whole
economy and market is largely dependent on the concept of demand and supply. These two
factors influence the market largely (Broadhurst et al., 2015). The Australian economy dealt with
the problem related to seeds for around 15 years. Since 2000, the country suffered from decrease
of native vegetation communities. After analysis of the article, I found that there was a mismatch
between the utilization standard and seed collection process.
The lack of industry body to oversee these factors created the problem of excess demand
and shortage of supply of seeds. It created the differences between demand for and supply of
seed in the Australian economy (Elsner, Heinrich & Schwardt, 2014). In order to meet the future
restoration target, the country should solve the increasing seed demand and limited seed supply
with the help of some measures. The higher demand and limited supply may results in food crisis
in future. In economic theory, demand and supply model is used for price determination. The rise
in demand and fall in supply leads to higher prices. Therefore, it would also impact the price of
the food in the Australian market. Therefore, I would probably suggest that the stringent actions
are necessary at regional, commonwealth and state level for effective restoration outcomes.
Article on monopoly
https://www.sciencedirect.com/science/article/pii/S030142151400336X

3REFLECTIVE JOURNAL
The article chosen is based on regulatory institutional reform and network regulation of
Australia. After analysing the article I may state that the country faced the problem due to
monopoly power of the electricity supply industry. There was a lack in the design and quality of
the institutional framework and regulatory arrangement. The organization of the Australia that
was behind this regulatory arrangements was the Australian Energy Regulator (AER). There
exists monopoly in the electricity supply industry of the Australia (Nepal, Menezes & Jamasb,
2014). As a result, the country suffered from the increasing network costs and electricity prices. I
may state after analysing the article that the electricity supply industry of the Australia was
dominated by the public sector distributors and generators. Even though, there was both public
and private players in the market. As there was no restriction, the public sector electricity supply
industry enjoyed the free market capitalism (Bauer, 2018).
Therefore, the public sector and products offered by them created monopoly power in
Australia. In addition, it resulted in higher prices and lack of competition in the market.
Therefore, the public sector electricity supply firms gained significantly by setting price well
above the marginal cost of them (Varian, 2014). It helped them to earn monopoly profit and
dominate the market. It hampered the consumers and other firms of the same sector. Hence, the
regulatory arrangements in Australia should be improved in order to maintain the stability of the
market. I would probably suggest that to control the monopoly in electricity supply industry of
Australia, regulation is one of the vital measure. It will lead to market transparency. Moreover,
privatization may control the state of monopoly of the government-owned corporations with
proper regulations.
Article on oligopoly
https://onlinelibrary.wiley.com/doi/abs/10.1111/1467-8462.12126

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The article is based on the service industry of the Australia. The service industry of the
Australia worked under oligopoly system. The contribution of the service industry on the
economic growth of the country was huge (Tyers, 2015). Even, the legacy is still now maintained
by the service industry of the Australia. The service industry of the Australia went through
microeconomic reforms in 1990s. As a Result, there exists several oligopolies in the service
industry, those who are privatized and regulated. I chose this article to analyse the oligopoly
market structure of the service industry of Australia and how it contributed in the economic
growth of the country.
In general, the market dominated by the oligopoly consists of few large sellers. Here, it is
found that the service industry of the Australia is operated by the few numbers of large firms.
According to the market structure of the oligopoly, I may state that sometimes the firms under
oligopoly reduces competition and creates higher prices for the consumers (Cowell, 2018). In
case of Australia, the firms under the service industry operated with the price cap regulation. It
helped to keep a limit on price. As a result, it may not affect the market or economy. The
regulation in the oligopoly is required in order to maintain stability of the market. The action of
one firm of the service sector may influence the performance of other service firms under
oligopoly market structure. Though, there was some cost bore by the economy due to distortions
in oligopoly. The service sector of the country played crucial role in the gross domestic product
of the Australia.
Article on public goods and externalities
https://www.oecd-ilibrary.org/content/paper/5js08hx1btlw-en

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The article is based on the externalities and public goods. Here, policy measures
undertaken in the agricultural environment of the Australia is discussed (Pannell & Roberts,
2015). One of the major sector of the economy is agriculture. I contributes largely providing
essential commodities such as feed, fuel, food and fibre (Heijdra, 2017). In addition, the
production process of the agriculture also comes with many negative and positive effects on the
environment. In simpler term, I can describe externalities as a cost of negative consequences that
impacts the other parties of the process. The cost of the externalities reflect on the cost of the
products involved in the process. Moreover, the externalities may also generate benefits for the
third parties.
However, in case of Australia, the environment of the country incurred the cost of
externalities produced by the agriculture sector of the country. The agricultural production
caused deterioration in water, soil quality and biodiversity of the environment. Here, I can say
that the environment of the country act as third party. The cost is produced from the production
of the agricultural goods (Goodwin et al., 2015). A good which is non-rivalrous and non-
excludable is known as public good. It is also called collective good or social good. Thus, it is
extended to every individual irrespective of pay. Moreover, the availability of the public good
does not decrease with consumption. It can be consumed simultaneously. Therefore, I may
probably conclude that the negative consequences on the environment of the Australia due to
agricultural production is public good. Thus, it is consumed by every individual of the Australia.
Therefore, this paper discussed about how to increase the agri-environment public good and
reduce agri-environment public bad.
Article on cost concept
https://neobiota.pensoft.net/articles.php?id=6960

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The article is based on the cost concept. The concept of cost is one of the important
aspect of the economics. In Australia, to manage the invasive species economic cost is incurred.
There exists a wide range alien species in Australia. The impact of the invasive species is
significant on the economy of Australia. Therefore, the cost of managing it also comes with huge
cost (Hoffmann & Broadhurst, 2016). Here, I need to describe the concept of economic cost to
understand the cost associated with the management of the invasive species in Australia. The
huge cost incurred by the federal government of Australia created a burden for the economy. The
prudence of one course of action with other course of action is considered as economic cost.
There is a combination of losses and comes with a particular value under the economic cost.
Hence, it is the summation of explicit costs. These explicit costs include cost of time, money and
other resources. There is no opportunity cost involved in the economic cost unlike the accounting
cost. Therefore, it only includes explicit cost (Romer, 2016). Here, the cost of managing the
invasive species of Australia includes only explicit cist. There exists no opportunity cost. The
country losses time, money and other resources in order to manage the invasive species in
Australia. The issue of the invasive species is common globally. Thus, the other countries of the
world also forced to incur the economic cost of controlling the invasive species (Uribe &
Schmitt-Grohé, 2017). The estimated burden of Australia as calculated in this article may vary
due to constraints in data findings. The process of data obtaining should be more transparent and
smooth in order to get the exact data related to economic expenditure and loss of the Australian
economy due to management of the invasive species.
Article on GDP
https://www.sciencedirect.com/science/article/abs/pii/S0736585315000428

7REFLECTIVE JOURNAL
The article is based on the economic growth of the Australia in relation with electricity
consumption and internet usage. The contribution of the gross domestic product (GDP) and
internet industry is significant on the electricity supply industry of the country (Salahuddin &
Alam, 2015). Therefore, I chose this article to analyse one of the pivotal macroeconomic concept
GDP with the help of the Australian economy. There is a relationship between the electricity
consumption, economic growth and internet usage of the country (Bade & Parkin, 2015). GDP is
one of the vital measure of the macroeconomics to understand the overall health of the country as
well as world. The produced goods and services within a particular time period in an economy
have a market value.
The market value is a monetary measure, which is known as gross domestic product
(GDP). It indicates the growth of the country (Carlin & Soskice, 2014). As a result, the position
of the country can be compared with the help of GDP with respect to other countries of the
world. GDP of the Australia is the summation of the all final goods and services produced in the
country. The growth of the internet usage is rapid in Australia. The strong growth of the internet
market also boosted the market for the electricity consumption. The country also witnessed
robust economic growth. It is found that the economic growth and internet usage impacted the
electricity consumption in the short run as well as long run (Gollier, 2018). This article used
some model like ARDL to in order to examine the role of the economic growth and internet sage
on the electricity consumption of the country. The robust economic growth expanded the demand
of the internet usage in the country. The usage of internet is dependent on the electricity.
Therefore, the increasing demand for the internet boosted the demand for the electricity
consumption.

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Article on monetary policy
https://onlinelibrary.wiley.com/doi/abs/10.1111/1475-4932.12301
This article is based on the monetary policy. In order to solve the issue of the stock
market of Australia, the central bank of the country, the Reserve Bank of Australia took
monetary policies. The main objective of the paper is to find out the effect of the monetary
policy on the stock market of the country (Brown & Karpavičius, 2017). Here, I would analyse
the role of the monetary policy on the economic growth. It is one of macroeconomic tool used by
the central bank of the country to control economic turmoil. The policy which is adopted to
control the money supply or short term interest rate, is known as the monetary policy (Heider,
2017). The policy is mainly implemented in order to maintain stability of currency and price by
changing interest rate and inflation rate of the county.
The monetary authority of the county, central bank monitors the interest rate and inflation
rate of the country. Moreover, the regulation of stock market is also done with the help of
monetary policy. There was unexpected change in the target cash rate of the Australia. As a
result, it affected the equity prices adversely. There was no reaction in the stock market because
of raw changes in the target cash rate (Mankiw, 2016). However, there was changes in the
expected component of raw cash rate. Thus, it influenced the stock market of the Australia
dramatically. In addition, it made intervention of the monetary authority mandate. I would
probably suggest that the Reserve Bank of Australia may also boost the stock market with the
help of its monetary policy measures. Hence, monetary policy plays an essential role in the
economic development of the country. Thus, the regulation and implementation of the monetary
policy is desired for the country.

9REFLECTIVE JOURNAL
Article on fiscal policy
https://www.sciencedirect.com/science/article/pii/S1059056014000677
The article is based on fiscal policy. The fiscal sustainability and fiscal reform of two
countries such as the Sweden and Australia is associated with the article. Therefore, example of
these two countries would help to state the importance of the fiscal policy (Miyazaki, 2014).
Fiscal policy is one of the vital macroeconomic tool used in development of the country. The
Sweden and Australia are OECD countries. These two countries required fiscal reform in order
to maintain the sustainability of the fiscal policy. The fiscal policy is implemented in both
political science and economics (Laibson & List, 2015). In order to, influence the economy of a
country, government uses the revenue collection and expenditure. Thus, it is known as the fiscal
policy. The implementation of tax and elimination or minimization of tax is associated with the
revenue collection of the government.
In addition, the spending made by the government is called expenditure, which is part of
the fiscal policy. To influence the macroeconomic variables of the economy, fiscal policy is
imposed by the government of the country. Thus, it is important as it brings reforms. One of the
crucial macroeconomic factor aggregate demand can be influenced on the basis of fiscal policy.
The changes in expenditure or tax collection system by the government impacts the economic
activity and aggregate demand of the country (Weber, 2018). The intervention of the government
helped to balance the differences between the government expenditure and government revenue
with the help of fiscal reforms in Australia. The government expenditure increased in Australia.
On the other hand, there was slower growth in government revenue of the country. Moreover, the
fiscal reforms helped to achieve a budget surplus in case of Sweden. Therefore, I may conclude
that the fiscal reforms helped in the sustainability of the fiscal policy.

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Article on foreign exchange
https://www.sciencedirect.com/science/article/abs/pii/S0313592615300084
The article is based on foreign exchange. In Australia, the handling of currency
composition of foreign exchange reserve is analyzed in this article. The US dollar, the currency
of the country dominated the market as principle currency of the world (Soesmanto, Selvanathan
& Selvanathan, 2015). Before the global financial crisis in year 2007, the US dollar continued its
growing stronger. However, the global financial crisis was a major setback for the principle
currency of the world. After the financial crisis there was currency turmoil, which resulted in
uncertainty in the economic condition of the country. As a result, there was also economic
downturn in the US economy.
It also influenced the economic condition of other countries dramatically. Therefore, the
central bank of the other countries also planned to shift their reserve currency from dollar to any
other currency of the world. In this respect, analysis of currency of EU is considered as stable
and suitable option. In addition, the performance of the currency euro is also stronger. Thus,
many other countries of the world decided to choose euro as reserve currency. In addition, there
are several factors that affect the foreign exchange reserve of the Australia. In this paper,
examining those factors would help to safeguard the foreign exchange reserve of the Australia
(Hill, Griffiths & Lim, 2018). Foreign exchange reserve is one of the important asset of the
country. It helps to maintain the currency position of the country. I would probably suggest that
the currency stabilization with the intervention of the central bank would be effective in this
matter. Hence, The value of the currency of one country with respect to the other country is
known as the foreign exchange. It helps to maintain the balance of payment of a country.

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Article on elasticity
https://ro.uow.edu.au/aabfj/vol8/iss1/7/
The above article is based on elasticity. It emphasizes on the income and price elasticity
retail finance segment of the Australia (Boland, 2014). This paper used two different approaches
such as autoregressive distributed lag (ARDL) and aggregate quarterly data in order to analyse
the income and price elasticity of the retail finance of Australia. The change in quantity
demanded of a product with respect to change in price is called price elasticity of demand. The
price elasticity of demand is only depended on the price. It does not affected by any other
factors. There is an inverse relationship between the price and demand. When the price rises
demand falls. On the other hand, when the price falls demand rises.
On the other hand, another important economic concept income elasticity of demand can
be illustrated as change in quantity demanded de to change in real income of the consumers. It is
only dependent on the real income. Thus, all other factors are kept constant. Moreover, if the real
income of the consumer changes it would impact the quantity demanded by them. Likewise, with
the increase in real income they would demand for more goods and services, on the contrary,
with the decrease in real income they would demand for less goods and services (Higgs &
Worthington, 2014). Therefore, there exists a positive relationship between the real income and
quantity demanded. The retail finance market of the Australia include margin loans, credit card
loans, housing loans and term loans. After the global financial crisis, there was an impact on
theses retail finance segments of the Australia. The country witnessed drastic change in income
and price elasticity of these segments. The global financial crisis affected the real income of the
consumer. Furthermore, it also influenced the price of the product. Thus, the changes in real

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income and rice affected the quantity demanded in turn. As a result, it impacted the income
elasticity and price elasticity of retail finance in the Australia.

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References
Australia.gov.au. (2020). https://www.australia.gov.au/
Bade, R., & Parkin, M. (2015). Foundations of macroeconomics. Pearson.
Bauer, M. J. R. (2018). Principles of microeconomics.
Boland, L. A. (2014). Methodology for a New Microeconomics (Routledge Revivals): The
Critical Foundations. Routledge.
Broadhurst, L., Driver, M., Guja, L., North, T., Vanzella, B., & Fifield, G. et al. (2015). Seeding
the future - the issues of supply and demand in restoration in Australia. Ecological
Management & Restoration, 16(1), 29-32. doi:10.1111/emr.12148
Brown, A., & Karpavičius, S. (2017). The Reaction of the Australian Stock Market to Monetary
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Elsner, W., Heinrich, T., & Schwardt, H. (2014). The microeconomics of complex economies:
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Gollier, C. (2018). The economics of risk and uncertainty. Edward Elgar Publishing Limited.
Goodwin, N., Harris, J. M., Nelson, J. A., Roach, B., & Torras, M. (2015). Macroeconomics in
context. Routledge.

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Heider, K. G. (2017). The economic organization. Routledge.
Heijdra, B. J. (2017). Foundations of modern macroeconomics. Oxford university press.
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Romer, P. (2016). The trouble with macroeconomics. The American Economist, 20, 1-20.

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Salahuddin, M., & Alam, K. (2015). Internet usage, electricity consumption and economic
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