QUESTION 1:

Explain, with the use of demand and supply diagrams, the difference between a change in quantity demanded of hats and a change in demand for hats.

QUESTION 2:

Explain, with the use of demand and supply diagrams, the effect of the following events on the market for solar panels:

(a) If the price of solar panels is below the market equilibrium price.

(b) The price of electricity for an average household has increased by 50 percent.

(c) New technology has increased the productivity of solar panel producers.

NOTE: IN YOUR ANSWER EXPLAIN THE ADJUSTMENT PROCESS.

QUESTION 3:

If the price of good "A" increased from $6 to $9 and quantity demanded decreased from 55 to 35 units, what is the price elasticity of demand for the good at this price range? Interpret the calculated elasticity value and explain the impact of the price rise on total revenue.

QUESTION 4:

Exercise has great positive externality on society in terms of health, economic and social cost of preventable diseases. Explain, with the use of demand and supply diagrams, the impact on equilibrium price and quantity of membership to health clubs from the simultaneous impact of an effective advertising campaign by the National Health Council and the reduction of company tax for health clubs providers.

QUESTION 5:

Assume the government has removed all barriers to entry in an industry where the existing firms are making an economic profit. Explain, with the use of demand and supply diagram(s), the impact of the government measures on the profit of firms in the industry in the long run industry.

QUESTION 6:

Critically examine, using the game theory matrix diagram and relevant assumptions, why there is a lack of price competition between the main banks in Australia. In your answer, evaluate both the collusive and non collusive scenario. What are the alternatives available to banks to maintain or increase their market share?