QUESTIONS (30 Marks)
1. Australia food price are expected to increase this year. It is in this context answer the following questions:
(a) Explain why the law of demand applies to food just as it does to all other goods and services. Discuss the price elasticty of demand for food. [4 marks]
(b) Explain the drivers of rising food prices in Australia. Use the concept of elasticity to explain the changes in equilibrium price and quantity [6 marks]
Word limit: 600 words
2. Prices of houses in Darwin have been rising in 2020. It is in this context, answer the following questions:
(a) What are the major drivers of rising house prices in Darwin. [5 marks]
(b) Using an appropriate diagram, explain your answer in part (a) above. [2 marks]
(c) How will the widespread availabilty of vaccines impact the housing market in future. [3 marks]
Word limit: 600 words
3. Darwin gets plenty of sunshine throughout the year yet the power bills remain high in the Territory.
(a) Describe the costs and benefits of intalling solar panels in Darwin. Describe the externality that arises from the use of solar panels in Darwin. What is the best way to avoid or regulate externalities? Discuss. [5 marks]
(b) Draw a graph to illustrate how solar panels have an impact on social welfare. Use the concepts of allocative and social efficiency [5 marks]
Word limit: 800 words
