Consequentialist  and Deontological Ethical Viewpoints - Recycled Cardboard - Economics Assignment Help

Assignment Task :

NATURE OF THE TASK 

Students will need to deliver a voice-over PowerPoint Presentation related to a current economic problem. This  is an individual assessment task. 

INSTRUCTIONS 

Students will be required to undertake reading and research in order to answer the questions provided below  and present their answers in a voice-over PowerPoint Presentation. 

Each student’s presentation length should be approximately 4-5 minutes.  

A list of required and recommended readings has been provided below.  

Required Reading: 

All students are expected to read the following article, reproduced below, prior to attempting this task: 

“Visy fined $36m over price fixing” 2007, ABC News, 2 November, https://www.abc.net.au/news, viewed 12  December 2020. 

Visy fined $36m over price fixing 

The Federal Court has fined Visy $36 million over its involvement in a price fixing cartel. 

Visy's former chief executive Harry Debny, who accepted responsibility for his part in the cartel, was fined  $1.5 million. 

Former general manager Rod Carroll, who also accepted responsibility for the cartel, was fined $500,000. Richard Pratt, as owner of Visy, escaped a personal fine. 

Mr Pratt admitted his company entered into a price fixing agreement with rival Amcor to maintain a share of  the cardboard box market. 

The Federal Court was told the deal was set up by senior executives in a series of meetings around  Melbourne. 

Justice Peter Heeney told the court the penalties ordered are more than twice the highest penalty previously  ordered for cartel conduct. 

"These penalties reflect the fact that in light of the time for which the cartel operated, the importance of the  market, the size of the company, the calculated and premediated conduct, the seniority of the individuals  involved, this was the worst cartel to come before the courts in the 30-plus years in which such conduct has  been illegal in Australia," he said. 

University of Melbourne professor Ian Ramsay backed the ruling. 

"Because of the nature of this industry, this $2 billion a year industry, cardboard packaging, virtually every  Australian uses cardboard packaging in some form or another," he said. 

"Therefore the cartel that operated for so many years had extremely widespread adverse effects on all  consumers."

Questions: 

1. Using Game Theory:  

(a) illustrate the market equilibrium for recycled cardboard packaging before the cartel formation. 

(b) explain why the companies formed a cartel and the impact of this on the market for recycled  cardboard packaging using your diagram from part (a). 

2. Evaluate the outcomes in the market for recycled cardboard packaging in terms of Pareto efficiency,  fairness, and the effect on the consumer surplus, producer surplus, and deadweight loss. Include  appropriate diagrams to illustrate your answers: 

(a) prior to the formation of the cartel. 

(b) after the cartel was formed by the two companies.  

3. Analyse the formation of the cartel in the recycled cardboard packaging from both the consequentialist  and deontological ethical viewpoints.

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