1) The optimal level of externalities depends on the marginal private costs and benefits.

Group of answer choices

-True

-False

2) Negative externalities generally result in overproduction or overconsumption.

Group of answer choices

-True

-False

3) In a perfectly competitive market that uses a marketable permit scheme to reduce pollution, all firms have the same level of marginal costs of abatement.

Group of answer choices

-True

-False

4) With low transaction costs and complete property rights, private bargaining can lead to a Pareto efficient outcome regardless of the ownership of the property.

Group of answer choices

-True

-False

5) Common resources are non-rivalrous and non-excludable.

Group of answer choices

-True

-False

6) Electric vehicles (EVs) are an important part of meeting global goals on climate change. EVs have emissions up to 43% lower than diesel vehicles. However, In Australia, electric vehicles account for only 0.6% of all new sales in 2020. Suppose the market for EVs is perfectly competitive. The market demand for EVs is given by: p = 20 - 2Q and the market supply for EVs is given by: p = 3Q. The marginal social benefit of adopting EVs is given by: p = 20 - Q. To encourage the purchase of EVs, the NSW government decides to subsidise the consumers. The optimal level of subsidy is ________ for the market to reach a socially optimal equilibrium.

7) Fisher library was open to the University of Sydney staff and students and community borrowers during pre-COVID times. Consider the market for library resources at that time. The demand for the staff is given by p = 10 - q ; the demand for the students is given by p = 10 -2q; and the demand for the community borrowers is given by p = 5 - q. The library resources are __________ and the aggregate market demand is ___________.

Group of answer choices

A) private goods; q = 20 - 2.5p when 0p<5 and q = 30 - 1.5p when 5p10

B) private goods; p = 25 - 4q when 0q<5 and p = 10 - q when 5q10

C) public goods; q = 20 - 2.5p when 0p<5 and q = 30 - 1.5p when 5p10

D) public goods; p = 25 - 4q when 0q<5 and p = 10 - q when 5q10

E) None of the other answers is correct.

8) Which of the following ways can be used to measure GDP?

Group of answer choices

A) Adding up market values of all goods and services that are produced domestically

B) Adding up the total amount spent on final goods and services related to consumption expenditure, investment, government purchases, and exports and then subtracting off expenditure on imports

C) Adding up market values of final goods and services produced domestically and then subtracting off the market values of final goods and services produced in other countries

D) Adding up the total amount spent on all goods and services related to consumption expenditure, investment, government purchases, but not including expenditure on exports or imports

E) None of the other answers is correct

9) Consider a 4-sector economy. In this economy, consumption spending, taxes and imports are the following:

C = 620 + 0.8(Y-T)

T = 10 + 0.25Y

M = 0.05Y

While I^p=300, G=250, X=10. What is the slope of the planned aggregate expenditure (PAE) line?

Group of answer choices

A) 0.50

B) 0.55

C) 0.60

D) 0.65

E) 0.70

10) An economy is described by the following equations:

C= 1500 +0.8(Y-T) consumption function

I^p= 900 planned investment

G=1100 government spending

NX = 100 net exports

T = 1000 taxes

What is the short-run equilibrium level of output if the potential output Y* = 10,000?

Group of answer choices

A) 400

B) 10,000

C) 14,000

D) 16,000

E) 12,000

11) The typical family in Canada consumes 80 pizzas, 14 tuques (knitted caps) and 20 beers. In 2020, pizzas cost $10 each, touques $40 each and beers cost $3 per bottle. In 2021, the price of pizzas went down to $8 each, while the prices of touques and beers remained the same. Between 2020 and 2021, a typical family's cost of living:

Group of answer choices

A) decreased by 11.3%

B) increased by 11.3%

C) remained the same

D) decreased by 20%

E) increased by 20%

In Australia the tax schedule is not indexed for inflation. So consider the following hypothetical tax schedule, expressed in nominal terms, for the year 2020.

Family income

Average tax rate (%)

<=$20 000

0

$20 001-$30000

10

$30 001-$50 000

15

$50 001-$80 000

20

>80 000

25

However, the government doesn't want families with a given real income to be pushed into higher income brackets by inflation. The CPI (times 100) is 110 in 2020 and 125 in 2021. How should the income bracket be adjusted in 2021 such that it meets the government's goal?

Group of answer choices

A) nominal income brackets should be increased by 13.6%

B) nominal income brackets should be increased by 14.7%

C) nominal income brackets should be multiplied by 1.25

D) nominal income brackets should be divided by 1.25

E) nominal income brackets should be decreased by 13.6%

13) All else equal, if an employed worker leaves the labour force to move to a different country:

Group of answer choices

A) The unemployment rate rises and the labour force participation rate rises

B) The unemployment rate falls and the labour force participation rate falls

C) The unemployment rate rises and the labour force participation rate falls

D) The unemployment rate falls and the labour force participation rate rises

E) The unemployment rate rises and the labour force participation rate remains the same

14) Suppose the Australian economy is experiencing a contractionary output gap of 5 percent. If the Okun's law coefficient, =2, what is the unemployment gap (u-u*), where u is the unemployment rate and u* is the natural rate of unemployment:

Group of answer choices

A) -2%

B) -2.5%

C) 3%

D) 2.5%

E) 2%