Question 1: Melbourne is well-known to be a dynamic city with numerous cafes. Since you enrolled in BUS5POE, there has been a lockdown in Melbourne and Victoria. Assume that cafes are in perfect competition in Melbourne and the initial market price of a take-out coffee is 5 dollars. Assume that cafes are authorized to open if they want during the lockdown:

a.The supply curve of take-out coffees

b.The demand curve of take-out coffees

c.The equilibrium in the market for take-out coffees

Question 2: Assume that restaurants are in monopolistic competition in Melbourne. Looking at the cost incurred by firms operating in a monopolistic market, what is the impact of a curfew on the profit/losses made by Melbourne restaurants in the short run? What could happen in the long run? Provide a graphical representation of the equilibrium of the firm in the short run and in the long run.

Question 3: Recent figures produced by the Australian Bureau of Statistic show and increase in unemployment as illustrated in Graph 1. In some industries, the Unions and workers agreed to cut wage to preserve jobs. Explain the economic rationale of a wage cut of 10%. With a graphical representation of the equilibrium of the labor market, show how a reduction in the wage can preserve jobs.

Question 4:Unprecedented bushfires impacted the Australian economy in late 2019 and early 2020. Explain:

a.One economic mechanism by which bushfires has increased the Australian GDP (even if it was detrimental to well-being) \

b.One economic mechanism by which bushfires has decreased the Australian GDP