Question: 2demonstrate how workers choose how much free time and how...
2.Demonstrate how workers choose how much free time and how much consumption to have in a day using the example of an increase in the hourly wage rate. (10 marks)
3.Describe how firms with market power decide how much to produce in order to maximise profit. (8 marks) Comment on the efficiency of this output. (2 marks)
4. Explain the effects of a tax on producers on the equilibrium price and quantity in a competitive market. (7 marks) Comment on the effect on surpluses and the gains from trade. (3 marks)
5. Show the effect of a rent ceiling on outcomes (price, quantity, economic rents) in a local housing market where demand for housing has increased. (8 marks) Suggest a possible long-run solution to any problems that are caused. (2 marks)
6. Demonstrate how external effects caused by pollution from production by firms can lead to market failure in a competitive market. (8 marks) Suggest a possible policy response. (2 marks)