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5:08 51 0/0 < ECON1020 2022 Final Exa... Q MACQUARIE MACQUARIE BUSINESS SCHOOL ECON1020 PRINCIPLES OF ECONOMICS 1 | Sl 2022 University Department of Economics SUPPLEMENTARY FINAL EXAM I PART 2 Total Marks 60 1 Weighting 30% SECTION 1 (20 MARKS) Question 1 [Max 150 words, 4 marks] Consider the market for avocados. Discuss whether individual avocado farmers can be characterised as price-setters or price-takers. Ignore for now the middlemen, e.g. Coles. Question 2 [Max 200 words, 8 marks] Keep considering the market for avocados you discussed for the previous question. Regardless of what you discussed for the previous question, assume that the market for avocados is perfectly competitive. Do the following: Draw a fully labelled diagram that depicts the market for avocados where the equilibrium price is $3.10, and the equilibrium quantity is Q. Let us assume that the highest willingness to pay observed amongst the potential customers is $5.50. Draw another fully labelled diagram that depicts the profit maximising decision of an individual avocado farmer who decides to produce the quantity qo given the market equilibrium price. Briefly explain the key information of your diagrams. Question 3 [Max 200 words, 8 marks] Keep considering the market for avocados. Assume a $1 tax per avocado imposed on individual avocado farmers. Do the following: Using the first diagram you drew for the previous question, show the effect of the tax on the market equilibrium price and quantity. Explain the changes occurred in the market for avocados. [SECr10N 2: next pagel 1/4 MACQUARIE BUSINESS SCHOOL ECON1020 PRINCIPLES OF ECONOMICS 1 | Sl 2022 Department of Economics SECTION 2 (20 MARKS) MACQUARIE University Automation, broadly referring to the adoption of machines and computers in the production process, has become increasingly common across many sectors and countries. For example, the market for industrial robots has experienced a dramatic expansion in the last couple of decades, as shown in Figure 1. Figure 1 1 Annual shipments Of industrial robots worldwide (thousand units)i o