Module Code: ECON1101

Topic: Getting off the couch: How can government intervene to improve physical activity?

Australia, like most other developed (and less developed) economies, is challenged by a range of public health issues. One key such challenge is sedentary lifestyles. The Australian Institute of Health and Welfare (2024) reports that, in 2022, 83% of adolescents aged 15-17 fail to meet the guidelines for adequate physical activity (the rates are 37% for adults aged 18-64 and 57% for adults aged 65 and over). What can governments do? One potential policy option is subsidised gym memberships. Others argue for a public awareness campaign. You are tasked with addressing the following questions, based on what we have learned in ECON1101 (Topic 1-6 inclusive):

a) Using the “skeleton diagram” provided*, suppose the government aims to arrive at Q**. Conduct an analysis to explain how such a subsidy would work, and evaluate the economic consequences of such a policy. What factors would determine the extent to which this policy is likely to be successful? If the subsidy is given directly to gym owners, what is preventing them from being able to absorb the full benefit of the subsidy, such that clients do not benefit at all?

b) Suppose an alternative option is to invest in a advertising campaign to raise public awareness around the importance of physical activity for health and wellbeing. If successful, how would this policy option compare with a subsidy on gym memberships? Refer to your diagram when answering this question.

This diagram is available for you as a PowerPoint file and an image. Choose how you want to work with the diagram to complete the task. Once you have finished your work, save your diagram(s) as image(s), and paste into Cadmus. While we prefer students to complete their diagrams digitally, we will accept high-quality photos/scans of printed diagrams with hand-drawn layers (i.e. you can print the diagram and hand-draw your work, and then scan this). However, it must be extremely neat.

 

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