Artificial Intelligence has been Increasingly Adopted Across Many Industries - Economics Assignment Help

Assignment Task:

Task:

PART 1 | ARTIFICIAL INTELLIGENCE I

Artificial intelligence has been increasingly adopted across many industries in recent years due to the technological advances in machine and deep learning and subsequently the falling cost of making predictions. One application of artificial intelligence in business is employee monitoring, which has been often reported by various media outlets, such as:

• The Economist. “Smile, you’re on camera: There will be little privacy in the workplace of the future.” March 28, 2018. (Use your MQ OneID to view)

• Cater, Leonie & Melissa Heikkilä. “Your boss is watching: How AI-powered surveillance rules the workplace.” Politico. May 27, 2021. Address Questions 1–3 within the maximum word count. Any number of words less than or equal to the maximum can achieve a high mark as long as you meet the standards in the rubric. Revise your discussions before submission to enhance brevity and clarity.

Question 1 | [10 marks, max 200 words] Discuss how the use of artificial intelligence in employee monitoring could affect the following: • The firm’s profit • The firm’s bargaining power • The workers’ wellbeing • The workers’ bargaining power

Question 2 | [10 marks, max 200 words] Discuss whether the use of artificial intelligence in employee monitoring brings about a Pareto improvement. Your discussion must refer to your discussion for Question 1. Question 3 | [15 marks, max 300 words] Discuss whether the use of artificial intelligence in employee monitoring results in a fairer outcome. Your discussion must refer to both of the following: • procedural judgement of fairness • substantive judgement of fairness ECON1020 PRINCIPLES OF ECONOMICS 1 | S2 2021 4 / 8 MACQUARIE BUSINESS SCHOOL Department of Economics

PART 2 | ARTIFICIAL INTELLIGENCE II The insurance industry is one of the areas which have been highly disrupted by the emergence of artificial intelligence. For example, the underwriting process, which involves assessing the risk of insurance applicants and determining whether to provide insurance, has been predicted to become significantly faster as machine and deep learning models, powered by a dramatic increase of consumer data, facilitate the automation of the process. The following articles address this disruption in detail: • McCurry, J., “Japanese company replaces office workers with artificial intelligence”, The Guardian, January 5, 2017. • Balasubramanian, R., A. Libarikian, & D. McElhaney, “Insurance 2030—The impact of AI on the future of insurance”, McKinsey & Company, 2021. Consider Bruno who manages an underwriting team in an insurance firm. Recently, the management of Bruno’s firm informed him of their decision to create a new risk assessment team, consisting of data scientists with machine learning expertise, and reduce the size of Bruno’s underwriting team. Bruno’s underwriting team will now work with the new risk assessment team in order to determine whether to provide insurance to applicants. Address Questions 4–6 within the maximum word count. Any number of words less than or equal to the maximum can achieve a high mark as long as you meet the standards in the rubric. Revise your discussions before submission to enhance brevity and clarity.

Question 4 | [10 marks, max 200 words] Use the model of a firm’s technology choice and graphically illustrate the management’s restructuring decision in a diagram with isocost curves. Your diagram should have the amount of human intelligence on the horizontal axis and the amount of artificial intelligence on the vertical axis. Fully label your diagram. Note that there are no actual numbers given in this question: you may make them up or simply use appropriate notations. Briefly explain the key information of your diagram.

Question 5 | [10 marks, max 200 words] Graphically illustrate the impact of the management’s restructuring decision on the firm’s production function. Your diagram should have the amount of human intelligence on the horizontal axis and the number of decisions on whether to provide insurance on the vertical axis. Fully label your diagram. Note that there are no actual numbers given in this question: you may make them up or simply use appropriate notations. Briefly explain the key information of your diagram. 

Question 6 | [10 marks, max 200 words] Consider Angela who currently works as a data scientist with machine learning expertise. Recently, she was offered a job by Bruno’s firm. The job offer includes a higher salary than her current job and the freedom to choose the number of work hours per day. But Angela is also an amateur musician who desperately dreams of becoming a professional one day. This motivates her to practice music as much as possible, which makes her value her free time very much. Using the model of individual choice, and assuming Angela accepts the job offer, graphically illustrate the impact on her choice of free time and consumption. Fully label your diagram. Note that there are no actual numbers given in this question: you may make them up or simply use appropriate notations. Explain specifically its impact on the following: • Angela’s choice of free time • Angela’s consumption level • Angela’s utility level

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