Question 1

In March 2021 the Australian Commonwealth Government announced the Tourism Aviation Network Support (TANS) scheme aimed at supporting the domestic aviation industry through the downturn resulting from COVID-19.

The scheme provides half price airfares to a number of domestic destinations.

Part (a)

Illustrate on a diagram of the domestic airline market, the likely impact of the policy on the market equilibrium for domestic air travel. You do not need numbers on your diagram or in your analysis as the emphasis required is on theoretical analysis of this policy. On your diagram make sure you highlight:

The price paid by consumers both before and after the policy has been introduced.

The price received by airline operators both before and after the policy has been introduced.

The quantity of domestic travel before and after the policy has been introduced.

The cost of the policy to the government.

The likely welfare gains and losses resulting from this policy.

Part (b)

What assumptions have you made in your analysis that will affect the incidence of the subsidy?

Part (c)

Can you foresee any possible unintended consequences of this policy?

Part (d)

Overall, would you recommend the policy? Why?

QUESTION 5 1 pol Why do we not count the value of intermediate goods and services in gross domestic product? Does the value of intermediate goods and services show up in gross domestic product? If so, how? TTT Arial 3 (12pt) TTTT Paragraph - Font fam - Font size TT. Pu fx Mashups Path: P Words:0Consider the following data, where gross domestic product (GDP) values are measured in millions of dollars, to answer the following questions: Year Nominal GDP Real GDP GDP Deflator 2009 $500 100 2010 $551.2 106 2011 $600.6 $546 2012 $600.6 120 What is the value of the gross domestic product (GDP) deflator in 2011? Round to the nearest decimal. O 154.6 0 1100 0 90.9 0 54.6 6 1120Exhibit 5-4 Gross Domestic Product Data Billions of National income account dollars Depreciation $ 800 Net interest 1.500 Compensation of employees 4.000 Profits 1.000 Rental income 100 Indirect business taxes 600 Consumer purchases 1.000 As shown in Exhibit 5-4, using the income approach, gross domestic product (GDP) is: $9,000 billion. O $6,600 billion. O $7,400 billion. O $8,000 billion. D Question 14 8 ptsIn 2018, U.S. gross domestic product (GDP) was roughly $20.5 trillion. Given that the U.S. population was roughly 327 million people, per capita GDP in the United States in 2018 was roughly $15.951 $54,545 $35.620 . $62,691 $49.733 D Question 4 2 pts From 2017 to 2018, real gross domestic product (GDP) in the United States increased by 0 10% 5:2% 29% ( 7.9% 3.9%