Bernard Salt’s 2016 article in The Weekend Australian Magazine (unintentionally) criticised “hipster cafes” and their most sought-after breakfast choice of “smashed avos”. Soon after, the sale of avocados in Australia tripled!
“I have seen young people order smashed avocado with crumbled feta on five-grain toasted bread at $22 a pop and more. I can afford to eat this for lunch because I am middle-aged and have raised my family. But how can young people afford to eat like this? Shouldn’t they be economising by eating at home? How often are they eating out? Twenty-two dollars several times a week could go towards a deposit on a house”. (Salt, B. (2016, October 15-16). I belong to a secret society and I am looking for new recruits. The Weekend Australian Magazine.)
Use supply and demand analysis and a correctly labelled diagram to explain why this article had a stimulating effect on the avocado market (sales of avocados tripled). [Hint: There is no such thing as “bad publicity”.] (600-800 words)Is there a role for government in encouraging young people to save for a deposit for a house? Explain your answer. (600-700 words) If you agree that there is a role for government, suggest one policy and explain how it would work. If you disagree that there is a role for government, suggest one way in which suppliers of housing orfinancial institutions could encourage young people to save for a house deposit. Explain your answer.