[10:35 am, 24/10/2022] Pavan: Consider the market for potato chips that is competitive with many small producers. Use the 4-step process of analysing market shocks (Also known as comparative statics) to outline the change in market conditions in the following two scenarios (Note each scenario is independent). a) There is a reduction in consumer income. (3 marks) b) The wages of employees in this industry increase. (3 Marks) [10:36 am, 24/10/2022] Pavan: Externalities and Public Goods 2. If a market has a negative production externality, explain how the social equilibrium is different to the private market equilibrium? What policy can the government use to correct the externality? (4 Marks) 3. What sort of good is characterised as being non-rival and excludable? Give an example. (3 marks)