Question 1 | [12 marks] Download the spreadsheet data that was used to create Figure 1.2 in your textbook The Economy. You can download the spreadsheet data by clicking on the xlsx link here: httpszll'ackblungithub.iolGlol'ialincir Consider the following three countries: Zambia. Spain and Japan. a. For each one calculate the rich to poor ratio in 198D, 199D and 2D14{E marks}. b. Describe the differences in the rich to poor ratio between countries revealed by your calculations. {3 marks} c. Describe the changes in the rich to poor ratio over time for each country. [3 marks] Question 2 | [10 marks] Consider the example of Greta and Carlos discussed in The Economy textbook Unit 1 Section 1.8 and Figure 1.9a and 1.9b. Assume the market price is now 1 tonne of wheat can be traded for 45 apples. Greta proposes a trade of 15 tonnes of wheat with Carlos. a. What would Greta and Carlos have available to consume of both goods if the trade goes ahead? (5 marks) b. Would both Carlos and Greta be better off after the trade? Explain. (5 marks)Question 4 | [15 marks] Using the model developed in The Economy Unit 3, Section 3], consider Jenny who is working at a large fossil fuel-based power plant in NEW. Prior to the energy crisis she had been receiving a wage (w) of 35D per hour. Assume that Jenny's spending on goods and services cannot exceed her earnings per day. Maximum consumption {c} per day is: c = wf24 f) where t= hours of free time per day. Your answers must Include both a diagram and words to clearly explain your diagram. In addition, your diagram must be fully labelled and therefore you must label both axes. correctly determine the vertical axis and horizontal axis intercepts. label the slope of the budget constraint and show the optimal amount of free time and consumption associated with it. a. Initially when facing w= $50 per hour Jenny chooses to work 8 hours per day and have 16 hours of free time per day. Using a fully labelled diagram describe Jenny's utility maximizing combination of free time and consumption. {4 marks] b. Due to the nancial impact of the energy crisis on the energy sector and the implementation of climate change policies, the owners of the fossil fuel-based plants have reduced Jenny's wage to $3t'l per hour. Using the same diagram as used in part "a" show Jenny's new utility maximizing combination of free time and spending on goods and services assuming that her hours of free time each day decrease to 12 hours. {4 marks} c. On your diagram decompose the overall change in hours of free time in response to the wage decrease into the {i} income effect and {ii} substitution effect. You must use words as well as the diagram to explain the decomposition of the overall change. {T marks} Angela's reservation 12 indifference curve, IC, 9 IC Bushels of grain 6.5 4.5 F What Angela gets Feasible frontier: Angela and Bruno combined 0 0 16 20 24 Angela's hours of free time a. "The new outcome F is Pareto efficient". Discuss if this statement is correct or false. Explain your answers using the graph. (3 marks) b. Using the graph what is the maximum amount of grain per year that Angela would be willing to pay so that the law passed? (3 marks) C. "As a result of the new law, Bruno receives no economic rent". Is this statement correct or false? Please discuss your answer making reference to the diagram. (Word limit 50) (3 marks) d. Now assume that the law has been amended so that a longer work day is permitted if both parties agree. The workers maintain the right for a 4-hour day if no agreement is reached. Thus, Bruno would like to negotiate a longer work day for Angela because he believes that there are many "win-win" possibilities available to them. Would you agree with him? If yes, explain your answer by using the concepts of "joint surplus" and the "Pareto efficiency curve". Show all alternatives that could result in a better deal for both on the diagram. (Word limit 130) (5 marks) e. Assume that Bruno and Angela make a deal. Discuss whether any potential new allocation resulted from the win-win agreement in part (d) would be fairer (Word limit 150) (6 marks). (Hint: Your evaluation must be based on both (i)substantive judgement of fairness and (ii) procedural judgement of fairness)Question | [20 marks] |Consider the example of Angela and Bruno discussed in The ECnm}! textbook, Unit 5 Section 5.9 and Figure 5.9. In Figure 5.9 {reproduced below}. points D and F are the outcomes before and after the introduction of a new law that limits Angela's work time to four hours a day. while also requiring a minimum pay of4.5 bushels. Based on this information1 answer the following questions