Assignment QuestionsAssignment Question 1This question relates to content and skills covered in Week 2 of the Subject Guide, ChapteUse the four steps from Week 2 of the Subject Guide to answer the following questions.Draw a separate diagram for each event and refer to points on the diagram in your explanat(a) Analyse the impact on the market for Australian tertiary education of a decrease in th[10 marks]b) Analyse the impact on the market for electricity of new regulations requiring the insta[10 marks](c) Analyse the impact on the market for tea of new medical research linking tea drinkers[10 marks]Word Limit 750Assignment Question 2This question relates to content and skills covered in Week 3 of the Subject Guide, ChapteBoth illicit and legal drugs are often cited as the classic example of goods which are vera) Explain why this might be the case.b) Draw a demand curve illustrating price inelastic demand and explain how the curve relatc) Use the diagram to explain how inelastic demand has implication for pharmaceutical compWord Limit 750Assignment Question 3This question relates to content and skills covered in Weeks 4 and 5 of the Subject Guide,Australia's taxation system will change on July 1, 2000 to include a broad based Goods anda) Use a demand and supply diagram to show the impact of the GST on prices and output in tb) Identify and explain the areas of consumer surplus, producer surplus and government taxc) Use your diagram and the concept of deadweight loss to predict the oveall effect on weld) Part of the new tax package is a reduction in income tax rates. Knowing that taxes chanAssignment topic Question 1In analysing the three examples I will use the four-step approach outlined in the study bo

Step one, identify which curve (demand or supply) will be affected?Step two, how will the curve be affected? It will be either a shift of the curve oStep three, in which direction?Step four, analyse the adjustment process for both supply and demand.

(a) Analyse the impact on the market for Australian tertiary education of a decrease in thIn analysing the market for Australian tertiary education, the demand curve would be affecThis factor was exogenous, outside the Australian model. The lower price in the United StaThe new demand curve (D2) now shows that at the old equilibrium price at point Z, the quanTo adjust to the new equilibrium, there must be an adjustment along both the demand and su Graph 1: Market for Australian Tertiary Education(b) Analyse the impact on the market for electricity of new regulations requiring the instIn analysing the market for electricity I found that the supply curve would be affected beIt would then shift the supply curve right, or away from the origin, as the supply has incTo adjust the curves so that they are at equilibrium, both curves will have movements alon Graph 2: Market for Electricity(c) Analyse the impact on the market for tea of new medical research linking tea drinkersIn analysing the market for tea the new medicinal characteristics would cause an increaseThe increase in demand would shift the demand curve to the right, a shift away from the orThe supply curve will have an upward movement along the curve because more will be supplie Graph 3: Market for TeaAssignment topic Question 2Both illicit and legal drugs are often cited as the classic example of goods which are ver

(a) Explain why this might be the case.(b) Draw a demand curve illustrating price inelastic demand and explain how the cu(c) Use the diagram to explain how inelastic demand has implications for pharmaceu

Elasticity is a measure of the responsiveness of quantity supplied to one of its determinaIllicit and legal drugs can be classed as both elastic and inelastic products because forPeople become addicted to drugs or need them for medical reasons and therefore they will aThis shows the product is inelastic because it is may be addictive or always demanded for

 

 Graph 4: Inelastic Demand CurveThe inelastic demand curve is very similar to a straight line, because of the curve's almo Graph 5: Inelastic Demand Curve Graph 6: Elastic Demand CurveBy colouring in the difference between the two dots and the vertical and horizontal axis,Whereas the other diagram is the elastic demand curve, and it shows the same two points wiBy showing the two diagrams I have attempted to show that the elastic demand curve does noInelastic demand products are different from other products on the market. Usually when aInelastic products however are not the same, they do not keep customers because their pricAssignment topic Question 3:Australia's taxation system will change on July 1 next year to include a broad based Goods(a) Use a demand and supply diagram to show the impact of the GST on prices and output in(b) Identify and explain the areas of consumer surplus, producer surplus and government ta(c) Use your diagram and the concept of deadweight loss to predict the overall effect on w(d) Part of the new tax package is a reduction in income tax rates. Knowing that taxes cha Graph 7: Australian Haircut Industry - Introduction of GSTWith the new taxation laws introduced in July there is now going to be taxes on products tAlthough the price has increased, the amount that the hairdresser receives has decreased (Consumer and producer surplus are both labelled on the diagram. Consumer surplus is foundProducer surplus is the area from the equilibrium point and down until it hits the horizonDead weight loss is another area labelled on the diagram. This is the area where the consuThe new tax package is broad and with the introduction of the higher income taxes it is goWhen the new tax regulations are introduced this may, at the beginning, reduce the demandAlthough there may seem to be a large amount of problems with the new tax laws, they will