BUECO5903-Carbon Tax in the Economy - Economics Assignment Help

Assignment Task

Task

Question 1.

Using a production possibilities frontier (PPF) diagram, determine how does a country’s PPF change in response to the events described below.

Make sure to explicitly indicate what sectors you are representing, and what sort of assumptions each event implies (i.e., a neutral effect vs a sector-biased effect). The latter follows from your assumptions on the factor intensity of the sector you are representing.

a) Reducing skilled migration into the country
b) Imposing import taxes (tariffs) on intermediate inputs
c) Increasing the expenditure on research and development
d) An increase in the retirement age (providing greater flexibility in labour markets)
e) The effects of a natural disaster

Question 2.

For each of the events describe below, you are required to explain:

1. The market you are evaluating (e.g., labour market, automotive market, etc).

2. Does the event act on the demand side, supply side, or both sides of the market?

3. Does the event lead to a quantity or price change? Or does the event lead to a shift in demand, supply, or both?

Make sure to explain what sort of assumptions you are making on the elasticities of demand and supply (when plotting your demand and supply, describe whether you are assuming an elastic or inelastic demand/supply).

a) A reduction of supply as a consequence of a disruption in the world oil markets

b) The implementation of a minimum wage

c) The implementation of taxes to manufacturing of cars in Australia

d) The implementation of a Carbon tax in the economy. A Carbon tax is charged according to the level of emissions of greenhouse gases in an economy.

e) The implementation of a new loan program to university students in the education sector

Question 3.

Compare the impact of a recession that reduces consumer income by 10 percent on the consumption of technology goods and house rentals. Suppose that the income elasticity of demand for technology goods is 3 and the income elasticity of demand for house rentals is 0.3. Based on your response, make a policy argument to support through government funding either businesses or house rentals.

Question 4.

Using a supply and demand analysis show first the labour market in equilibrium, and then show

a) the effect of a reduction in the demand for labour as a consequence of a pandemic.

b) The effect of a government subsidy to producers to restore the employment of labour.

Provide a diagram with clear axis details. Make sure to explain what sort of assumptions you are making on the elasticities of demand and supply.

Question 5.

Using the following table

a) construct the cost schedule for a firm operating in the short run
b) Graph the average variable cost, average total cost and marginal cost curves.

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