Microeconomics

Diagrams and definitions should be used where possible.

1) Answer the following scenarios in regard to the consumer goods market.

a) The job market is becoming harder to enter. What happens to consumer surplus, producer surplus, total surplus, price and quantity? (5 mark)

b) The minimum wage is lowered. What impact does both of these changes have on consumer surplus, producer surplus, total surplus, price and quantity? (5 mark)

Diagrams are required. Changes in equilibrium points must be shown and changes for each element must be shown and explained.

2) Should alcohol be taxed? Using economic theories and idea to justify your decision. This requires diagrams, definition and constructing an argument in line with your decision. Marks are allocated based on the effective links between your argument and economic ideas.

3) If you were trying to increase the level of education attained by citizens, which policy is more effective; subsidies or price ceiling? Diagrams are required. Plus student must demonstrate the level of surplus that would result for each policy.