(1) Use Lorenz curves to discuss how the following policies or shocks may impact upon inequality:

i. Automation (technological change), both in the short run and over time.

ii. South Africa's child support grants iii. Centralised wage bargaining at the level of the industrial sector (e.g. clothing, machinery)

(2) Develop the model used to explain society's choice of inequality (section 19.4 of the text), and use it to discuss:

i. Why some countries have persistently high inequality, and others have persistently low inequality ii. How rising risk aversion preferences in a society may impact upon inequality outcomes. {Can you illustrate these changes on inequality and the Gini using Lorenz curves ?}

(3) Some general questions on South African inequality (please refer to lecture notes plus prescribed additional readings)

Why is inequality so high in South Africa?

What explains the persistence in South Africa's inequality.

How progressive is South Africa's fiscal policy?

(4) Use the Bruno-Angela farming model to discuss the implications of the 1914 Land Act on bargaining power and allocation of farming output between farm owners and sharecroppers. Also discuss the impact of the policy on inequality of land ownership (using Lorenz diagrams).

(5) Use the framework presented in section 19.5 to discuss how South Africa's child support grants may impact upon inequality in South Africa. Also consider how this policy may impact upon inequality over time and across generations.

1. Draw an inverted abatement cost curve and state the assumptions that this curve uses. Label all key areas on the curve.

2. How is an inverted abatement cost curve obtained? Discuss the steps in detail.

3. What is the difference between a public good and a common pool resource?

4. What is the difference between a fallback (reservation) option and a minimum acceptable offer?

5. Graphically show how to solve the problem of a negative externality through enforcing compensation. Label the pareto efficient quantity and cost curves clearly. Label your axes. Show which area corresponds to total compensation paid.

6. Discuss the limits of markets.

7. Graphically draw cap and trade models and discuss the outcomes Hint: Make sure you understand what a convex curve is

1. Compare the equilibrium outcomes for three different oligopoly interactions we discussed, focusing on profits earned and welfare outcomes for the consumers and the firms.

2. Derive the long-run industry supply for perfectly competitive firms by explaining pecuniary economies/diseconomies. This would need to be done with the aid of some diagrams.

3. Graph isoquants to show returns to scale given some production functions.

4. How do you minimise costs given some production quota?

5. How do you maximise output given some cost constraint? 6. Graph all types of price discrimination and use these to compare welfare outcomes for discrimination versus single-price monopolies. Under what conditions can the varying types of discrimination exist?