ECO206Y1Y: Microeconomic Theory, Fall 2020-Winter 2021
Department of Economics, University of Toronto
Writing Assignment 3
Due date Time Weight Location
Writing Assignment 3 Mar 10 7:00PM 10% Crowdmark AND Quercus by deadline
A late penalty of 15% of the assignment score will apply per 24 hours starting after the deadline.
No exceptions for illness, computer problems etc.
Crowdmark is for grading and Quercus is for running your work through Turnitin. You need to
submit both for your assessment to count as submitted.
To use course economics to answer a real world question. To develop your ability to communicate
your analysis to a non-specialized audience.
Who you will
Consider the high-speed home internet market in rural Ontario. It requires infrastructure that is
very expensive to build. Right now, there is no infrastructure. There is only one internet provider,
OneNet that uses satellites to provide home internet so it doesn’t need infrastructure.
OneNet has hired you as a consultant on their pricing strategy. Your memo will be circulated
widely, both within and outside the company, so you’re writing for a smart, informed audience
that does not know our economic terms and definitions but can understand basic economic
reasoning. They expect the highest level economic analysis you are capable of, communicated in
clear English, with no jargon.
What you will
OneNet currently offers two pricing packages. Each package has a monthly fee, and an associated
maximum amount of data per plan. Going over the limit results in very high overage charges.
Due to the current worldwide situation, every household now has someone working online from
home and/or attending school online, which requires stable home internet access. After extensive
consumer lobbying, Ontario now requires that OneNet remove any overage charges and data limits
on all their home internet plans.
Your task is to recommend a new pricing structure to OneNet that satisfies the new requirement
and maximizes their profits.
What you will
Write a memo that
1. Recommends a pricing strategy. E.g. Two packages, one with a lower monthly fee and a lower
data cap than the other, chosen so that...You are not expected to provide exact numbers as you
don’t have the information you to do so.
2. Details the reasoning behind your choice.
a. Your economic reasoning should use ECO 206 concepts–think about firm choices under
different technologies, etc.
b. You must be clear about the strengths and weaknesses of your position.
c. Attempt to convey the conditions under which your arguments hold and any potential missing
Your assignment must have:
1. An introduction (first paragraph) that gives a concise summary of your reasoning.
2. Main body, structured into different paragraphs, that expands on this summary and details your
3. A short concluding paragraph that reiterates your recommendation and summarizes your
analysis adding depth from the analysis in the body.
4. A reference section at the end that includes all the sources you cite. References are not
required, but if you use work, please cite it. In-text citations and the reference section do not
count towards the word count.Use the APA formatting and Style Guide.
ECO206Y1Y, Fall 2020 1 of 4 University of Toronto
• OneNet currently offers two pricing packages. The Speedy package has a lower monthly fee but
a lower data limit. If Speedy users use more than their limit in a month, they are automatically
billed according to the Turbo package, which has a higher monthly fee, but a higher data cap.
Turbo users who go over the limit are charged a very high per-GB fee. • Data shows that
consumers with lower incomes buy the Speedy package while richer households with larger families
buy the Turbo package. • Ontario only restricts the overage charges and data caps. It does not
impose any other pricing restrictions. • Providing internet through satellites has a constant,
non-zero, per-GB Marginal Cost. assume for simplicity that the fixed cost is the one-time cost of
sending the satellite into orbit and that has already been paid. Assume that this remains
unchanged with the pandemic.
• There are only two types of customers. OneNet knows each type’s demand curve, but cannot
identify each individual’s type at the time of purchase (or after because households can change
their type, think income/job/no. of members etc. can change for many reasons).
• To keep things simple, assume that even with the worldwide events, there are still two types,
though the relative proportions of each type could change. Effectively, make some clearly stated
assumptions, e.g. how and why each type’s demand changes if it does.
• You can assume that household internet demand is stable and does not fluctuate month to
• Each customer has to buy a modem, etc. as a one-time setup cost. After that, their price
depends on the package they choose. If they’re an existing customer, they’ve already bought the
Length: You have a maximum of 750 words1 which should be about three pages when typed,
with double spacing and using a font size of 12 points.
• Put the word count of your assignment in parentheses at the end. For example, “(737 words)”
• You must use only words, no equations, graphs or tables.
• Every page of the assignment must have a header with your full name, student id number and
the class information (i.e. ECO 206, Fall 2020)
• Quercus: Each assignment should be a Word document without any embedded images. Office
365 access is free with your UofT student account. Any other formats will be treated as a late
submission till the correct version is submitted.
• Crowdmark: Convert the Word file into a pdf file (File -> Save As -> pdf) and upload on
Academic Integrity is central to an UofT education. We take it seriously and so should you.
Do your own work. We design course work to develop and assess skills useful in upper-level
courses and the job market. You lose a valuable opportunity to develop these skills and lower the
value of the UofT brand when you cheat.
Properly acknowledge other people’s ideas. You’d want the same for your ideas.
Ask if you’re unsure. On this assessment you can discuss your ideas with your us, the study
center and your classmates. However your work and your words have to be your own.
Report any suspected violations by other students to the professor immediately. Students who
cheat, hurt others who work hard and honestly. Maintaining the Academic Integrity of the course
is a shared responsibility; do your part.
Read the University of Toronto’s Code of Behavior on Academic Matters. See:
http://www.artsci.utoronto.ca/osai. This is especially important if you’re new to the UofT.
don’t count towards the word limit. However, if you use footnotes as a
way around the word count, we will ignore the information there.
We usually forgive up to 10% of the word count, more than that and penalties apply.
ECO206Y1Y, Fall 2020 2 of 4 University of Toronto
• Just like Writing Assignment 2, I’ve put restrictions on your assumptions to simplify the task.
Some students may not like this, but please work within these assumptions. We need to balance
giving you a chance to explore the topic independently within the word limit against consistent
• I have tried my best to anticipate common questions and address them in the instructions. If
further questions come up post them on Piazza or stop by office hours.
• For this assignment, I would recommend you start by deriving/graphing what OneNet’s optimal
pricing packages are before worldwide developments. Then think about what changes in the
environment and why? Why are people worried about overage charges now when it wasn’t an issue
• In this new environment, what would the new pricing structure look like without Ontario’s
• What does the restriction change? Is there something that is necessary for the new pricing
scheme to work that is not possible because of the restriction? How to adapt the pricing scheme?
• You can use numbers to illustrate your point, but use it sparingly. For example, sometimes it
may be easier to describe a package as 50GB for $100 a month rather than saying a maximum
quantity of data for a fixed monthly fee. But, this is a slippery slope so use only when absolutely
necessary. Stay away from using numbers to calculate things. It doesn’t make sense as you don’t
have data. OneNet needs a procedure and reasons why they should follow it, not calculations
based on made up numbers.
• You can name your price discrimination strategy if you want in the introduction, that is
probably a good strategy so your grader has some idea what you’re arguing, BUT you cannot
assume that your audience knows what it means. You need to explain it to your reader. Defining it
upfront and then using it as jargon later doesn’t help either. You can save words by explaining it
while explaining your analysis. Hint: check to make sure the conditions and assumptions hold in
your chosen form of price discrimination. E.g. while first-degree would be nice to implement from
a firm’s perspective, is it possible here?
• Writing should be the second step, not the first. When ready to write, sketch out your argument
with bullet points. As you do this you may want to go back and forth between your diagram and
writing as your thinking evolves. When you have a good outline, flesh out the sentences. Keep
only what is essential. The word count is a disciplining device.
• Same advice about talking to some else and using the college writing center from the previous
assessments applies here. Remember, what seems clear to you may not be to the reader.
“Normally, students will be required to submit their course essays to Turnitin.com for a review of
textual similarity and detection of possible plagiarism. In doing so, students will allow their essays
to be included as source documents in the Turnitin.com reference database, where they will be
used solely for the purpose of detecting plagiarism. The terms that apply to the University’s use of
the Turnitin.com service are described on the Turnitin.com web site.”
Your mark in each of the four categories (in bold) on the next page will reflect how your well your
assignment meets overall category criteria. The rows below each category give you an idea of how
we determine which category your work fits into.
ECO206Y1Y, Fall 2020 3 of 4 University of Toronto
Excellent Good Competent Problematic
15-18 14 12 5
Appropriate 206 framework
chosen and clear from context.
We can figure out the setup (i.e.
what the axes, opportunity cost
and preferences are.)
Setup is used correctly and
consistently. Argument is
specific, focused, developed very
Excellent job translating task
into framework. Shows
High quality evidence used to
effectively strengthen argument
Setup somewhat clear and used
analysis using the framework.
Would like to see more work on
fleshing out the argument.
Evidence used when possible
but source quality or how it is
used could be improved
Student has tried to setup a 206
choice framework, but it is
unclear or major mistakes
present in use of framework. OR
Analysis is superficial and reads
like a restatement of course
materials without much
Some attempts made to go
beyond class material but stated
and not integrated into analysis.
If evidence used it does not add
strength to argument or source
quality needs improvement
Analysis at ECO 101
level or serious errors in
use of 206 concepts.
15-17 13 10 5
Strengths and weaknesses of
argument tied to assumptions
and the conditions under which
Evaluation criterion, i.e. why
they recommend, clear.
related to own argument and
Counterarguments not explicitly
addressed/ evaluation criterion
could be improved. However
nuances of own argument
communicated clearly and tied
Attempts made but could do
with significant improvement.
Little to no attempt at
critical analysis. Reads
like a problem set
5 4 2 1
Short, clear sentences. Pleasure
to read. Well structured
argument and flow logical. Uses
simple English to clearly explain
economic concepts. No jargon.
Some sections required
re-reading to understand. Or
multiple thoughts per paragraph
but flow good. Or language
could do with some
improvement to match audience.
No to minimal use of jargon.
Multiple reads required to
understand content or requires
Uses technical terms in body
with explanation at the start.
This is not an academic paper,
you can’t expect readers to
scroll up to find what the
definitions are. Write for your
Writing makes it hard
to understand content.
Or very hard to discern
flow of logic. OR
Uses technical terms
without proper attempt
5 4 2 1
accurate and in-depth summary.
Have to infer recommendation
from context OR Clear
argument but excessive
summary as well. Don’t waste
your words repeating what you
will say later on.
Unclear what recommendation
is. OR Argument identifiable
but summary needs work on
depth, conciseness or accuracy.
No position taken or
5 4 2 1
Restates argument with added
depth from essay body analysis.
Clarity of argument or position
could be improved OR either
thesis or position unclear.
Introduces new material
without development or could
be significantly improved.
No clear conclusion
ECO206Y1Y, Fall 2020 4 of 4 University of Toronto 学霸联盟