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- Do you think that the Australian Banking industry is closer to a Monopoly or Perfect Competition market structure? Give reasons for your answer and explain with the aid of a diagram the difference between the two market structures. Also explain which market structure serves the public better?
- The Australian government is considering different methods for pricing carbon emissions.
- i) What is the general rationale behind introducing a price for carbon emissions?
- ii) Explain three methods for addressing the external cost of carbon emissions.
iii) Demonstrate graphically carbon tax pricing to address the external cost of carbon emissions.
- iv) Discuss who you think would carry the cost of a carbon tax for elastic vs inelastic goods and services.
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a.
| Output | TFC | TVC | Total Cost | Average Fixed Cost | Average variable Cost | Average cost | Marginal Cost |
| 0 | |||||||
| 1 | 8 | 10 | |||||
| 2 | 12 | ||||||
| 3 | 25 | ||||||
| 4 | 27 | ||||||
| 5 | 4 | ||||||
| 6 | 4 | ||||||
| 7 | |||||||
| 7 | |||||||
| 8 | 5.75 | ||||||
| 9 | 48 | 6.44 | |||||
| 10 | 70 |
- Fill in the columns above
- At what point do diminishing returns set in? Explain your answer.
4b. Assume that you have taken 12 months’ leave without pay from your full-time job as a dressmaker and set up a business ironing and repairing clothes. You have taken out a 12-month lease on a small shopfront in a suburban shopping centre. You have bought all the equipment you need for your business and arranged the fit-out of your premises to accommodate your work requirements. You have paid for these set-up costs out of your previous savings. You will not be able to buy any more equipment during the next 12 months. For the year, your total explicit costs are $25 500 and your implicit costs are $45 000.
- Give some examples of your explicit costs.
- Give some examples of your implicit costs.
- In your short-run period, how would the law of diminishing returns be likely to apply if the business was doing so well that you started taking on extra staff members?
- If your total revenue is $80 000, what is your economic profit?
Economics Questions Solved. Economics Homework Help. Economics Essays. Graduate Economics Papers. Economics Assignments Help. Economics Tutors Online.
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- The following information shows price ($) and quantity demanded (thousands per week) for entrance fees for a local attraction:
| Price | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | |
| Demand | 10 | 9 | 8 | 7 | 6 | 5 | 4 | 3 | 2 | 1 | 0 | |
- Calculate the elasticity of demand at each price level change using the midpoint method.
- Describe how the elasticity of demand changes with respect to price.
- Calculate the change in revenue for each price change.
- Are the changes in revenue from part iii) consistent with the values of elasticity of demand that you calculated in part i)?
- Your minister for housing wants to increase the number of privately owned low – rental housing units available by 7 percent.
- If the elasticity of supply of this type of housing has been estimated to be equal to 0.3 over the relevant period, how much is the percentage increase in rent required?
- If the rent for these units is currently $70 a week what is the increase in rent required?
