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In all university assignments, including Economics, you should aim to make it as easy as possible for your lecturer/examiner to follow and understand your written response. It is important to remember that your lecturer will be reading and assessing a large number of students' assignments and they want to be able to understand your response without too much difficulty. Using headings also indicates in a subtle way to your lecturer that you have worked in a systematic way and that you are organised in your approach.

As you can see in the Economics assignment covered in this tutorial, there are several sections of the task to be addressed. You need to guide your lecturer through your assignment. Using headings as "signposts" of the sections that are being addressed at particular points is a good way of doing this.

Look at the final draft of the sample response on illicit and legal drugs. We have reproduced it for you below.

As you can see, this response does not include any headings, even though there are three components to the task question. You can also see that it is not easy for the lecturer to know where the different sections of the task start and end. It would make it much easier to read in relation to the tasks if headings were included.

Both illicit and legal drugs are often cited as the classic example of goods which are very price inelastic.

• a) Explain why this might be the case.
• b) Draw a demand curve illustrating price inelastic demand and explain how the curve relates to the definition of price elasticity of demand.
• c) Use the diagram to explain how inelastic demand has implication for pharmaceutical company price setting and revenue.

[1] Elasticity is a measure of the responsiveness of quantity supplied to one of its determinants (Gans, King and Mankiw, 1999, page 88).

[2] Illicit and legal drugs can be classed as both elastic and inelastic products because for some there can be close substitutes found. Therefore they are not needed as much and people are not dependent on just the one particular product. With inelastic products, when the price changes dramatically there is not a large decrease in the quantity demanded. This shows that people who are dependent on this product have no choice, and therefore will pay a higher price for it. These products will always be demanded.

[3] People become addicted to drugs or need them for medical reasons and therefore they will always demand them. This means that distributors and sellers can raise their prices and people will still buy them, there will not be a dramatic decrease in consumers if there is a sudden price increase.

[4] This shows the product is inelastic because it is may be addictive or always demanded for health reasons. It is something that people have to have so they can live, and therefore prices can increase, as quantity levels of consumers will not decrease dramatically.

Graph 4: Inelastic Demand Curve

[5] The inelastic demand curve is very similar to a straight line, because of the curve's almost vertical appearance. It shows that quantity levels will only decrease by a little when price increases quite dramatically. The two points I have drawn on the curve show this. Even when I made one dot quite a lot higher than the other the quantity demanded didn't decrease dramatically.

Graph 5: Inelastic Demand Curve

Graph 6: Elastic Demand Curve

[6] By colouring in the difference between the two dots and the vertical and horizontal axis, you can see the revenue gain is larger than the revenue loss (as drawn on the diagram).

[7] Whereas the other diagram is the elastic demand curve, and it shows the same two points with similar dramatic price increases. The price increases however, show a large drop in the quantity levels. Again, when you shade in the required areas you can see that with the same price increase the revenue loss wedge is larger than the revenue gain. This then explains that with a dramatic price increase inelastic companies still make a profit.

[8] By showing the two diagrams I have attempted to show that the elastic demand curve does not have the same responses as the inelastic when it comes to price increases, and that the products which are inelastic can absorb slight price increases and will not lose a lot of their consumers.

[9] Inelastic demand products are different from other products on the market. Usually when a products price increases consumers may change brands or find a substitute product, and this is a way that product prices are kept reasonable, as long as all the products don't go up all at once. This is because these products rely on their demand to maintain their profit.

[10] Inelastic products however are not the same, they do not keep customers because their prices are low, or because it is a well-known brand name. Pharmaceutical companies know that their market is dependent on their products and therefore they can raise their prices. These are a product without which the consumer would not be able to survive, that is why when there is a dramatic price increase there is not the same decrease in quantity demand. For example the price of cigarettes has recently risen but this has not encouraged many smokers to quit, this is because they are addicted and can't stop therefore they are willing to pay the higher price for their nicotine fix.

1. Which paragraphs do you think respond to Subtask A of the assignment?

 Paragraph 1 Paragraph 2 Paragraph 3 Paragraph 4 Paragraph 5 Paragraph 6 Paragraph 7 Paragraph 8 Paragraph 9 Paragraph 10

2. Can you think of a heading that encapsulates the requirements of Subtask A?

Look at the examples below and select the one that you consider to be the best heading for Subtask A.

 Illicit and Legal Drugs Price Inelastic Goods Price Inelasticity and Illicit and Legal Drugs

3. Before which paragraph would you put a heading for the response to Subtask B?

 Paragraph 1 Paragraph 2 Paragraph 3 Paragraph 4 Paragraph 5 Paragraph 6 Paragraph 7 Paragraph 8 Paragraph 9 Paragraph 10

4. At what point in the text would you begin Subtask C and place a heading?

 Paragraph 1 Paragraph 2 Paragraph 3 Paragraph 4 Paragraph 5 Paragraph 6 Paragraph 7 Paragraph 8 Paragraph 9 Paragraph 10

5. The key areas of Subtask C are inelastic demand, pharmaceutical company price setting and revenue, and the implications of inelastic demand for price setting and revenue of pharmaceutical companies.

See if you can combine these concepts into an appropriate heading.

Beginning with "Elasticity is a measure..." and ending with "...as quantity levels of consumers will not decrease dramatically", Paragraphs 1-4 respond to Subtask A.

In using headings in assignments, it is most important that the headings you devise encapsulate the task and are relevant to the information to which they refer. Otherwise, they will only confuse your lecturer and will not give them the impression that you are in control of your response.

If you selected the third option - Price Inelasticity and Illicit and Legal Drugs - you are correct. This heading encapsulates all the concepts involved in Subtask A.

If you think it would be best placed after the graph "Inelastic Demand Curve" and before Paragraph 5, you are correct.