1. Draw a graph of market equilibrium. Explain what the equilibrium point means (3 marks). On the same graph, draw a condition of surplus (1 mark). Discuss what surplus means by answering the following sub-questions. a) Describe the behavior of buyers and sellers in times of surplus (1.5 marks). b) From your surplus price describe what will happen to the market price
2. Describe and compare the level of price control within the four market structures (4 marks). Identify the market structure/s where a firm can be a price-maker (1 mark). If the firm is a price-maker, then the company will always be profitable. Explain why you agree or disagree with this statement (2 marks).
3. The Australian government has taken several actions to manage the economy in response to the corona virus. Select any 2 actions and classify whether they fall under Fiscal Policy or Monetary Policy by stating the tools used and the desired effect of the action. (4 marks each x 2 = 8 marks) Does an economy need both Fiscal and Monetary Policy? Support your answer by enumerating the limitations of each policy (3 marks).