Referencing Styles : Harvard Question 1: Refer to Chapter 6- Imperfect Competition (a) How monopolistic competition differs from oligopoly market structure? Explain. (b) Explain with real life examples and illustrate short-run profit maximizing situation under monopolistic and dominant firm price leadership situation under oligopoly. (2 marks) (c) Define, illustrate and explain with examples the method of price discrimination used by the cinema industry in Australia. Question 2: Refer to Chapter 7- Market Failure and Government Policy (a) Assume that a firm discharges waste into a river. As a result, the marginal social costs (MSC) are greater than the firm’s marginal (private) costs (MC). The table below shows how MC, MSC, AR and MR vary with output. Assume that the marginal private benefit (MB) is given by the price (AR). Also assume that there are no externalities on the consumption side, and that therefore MSB = MB. Study the table and answer the following questions. (i) How much will the firm produce if it seeks to maximise profits? (ii) What is the socially efficient level of output? (iii) How much is the marginal external cost at this level of output? (iv) What size of tax would be necessary for the firm to reduce its output to the socially efficient level? (v) Why is tax less than the marginal externality? Explain. (b) Many economists have argued that a form of ‘congestion tax’ should be used by the motorists who use their cars on busy roads, to take account of the external costs they impose on other roads users and pedestrians. List and compare the advantages and disadvantages of following two measures to reduce congestion in Australia: (i) Using a system such as in Singapore (see box 7.2) where charges are deducted from a pre-paid smart card inserted into a device in the car; and charges vary according to the time of day and /or the level of congestion. (ii) Installing cameras that record numbers plates of cars in a designated zones, and then fining their owners if a daily fixed fee for driving in the zone has not been paid (this system is used in London). Question 3: Refer to Chapter 9- Introduction to Macroeconomics (a) Define and distinguish between nominal GDP and real GDP. (b) Using the data below calculate nominal GDP for the year 2014, 2015 and real GDP for year 2015. (2 marks) (c) The table below gives the national accounts data for Australia for a given year in 2013. Study the data from the above table and calculate Gross Domestic Product (GDP) using the expenditure approach and the country’s gross national expenditure (GNE). (a) Refer to the above table in Q3 (c) and calculate the level of Injection (J) and Withdrawal (W) for Australia. Based on W and J, what will happen to GDP growth? (b) Distinguish between deflationary-gap and an inflationary-gap? Illustrate and explain. (c) What is the effect of minimum wage on employment? Illustrate and explain.