BUSS102 MARKET MICROECONOMICS Principles Session 1, 2017 Tutorial Presentation: Group 5 Due: Week 10 Tutorial Class 1.Â AÂ recentÂ AustralianÂ government-commissionedÂ healthÂ reportÂ shows that tooth decay amongÂ children andÂ low income earners has risen byÂ 10%Â sinceÂ 2000.Â ShouldÂ theÂ governmentÂ subsidiseÂ dentalÂ care forÂ childrenÂ andÂ lowÂ incomeÂ earners?Â CriticallyÂ discuss.Â Use appropriate economic tools, includingÂ diagrams, studiedÂ in this unit to illustrate your arguments. 2.Â InÂ 2010,Â theÂ AustralianÂ governmentÂ imposedÂ aÂ taxÂ onÂ AlcopsÂ to reduceÂ teenageÂ bingeÂ drinkingÂ andÂ alcohol-relatedÂ harmsÂ and hospitalization, and also to raise tax revenue. However, by the end ofÂ theÂ financialÂ yearÂ noÂ reductionsÂ inÂ teenageÂ bingeÂ drinkingÂ and alcohol-relatedÂ harmÂ wereÂ recordedÂ and,Â moreover,Â theÂ revenue raised from the tax was 6% less than predicted. a.Â AsÂ anÂ economist,Â areÂ youÂ surprisedÂ aboutÂ theÂ outcomeÂ ofÂ the governmentâ€™sÂ taxÂ policy?Â CriticallyÂ discuss.Â UseÂ theÂ demandÂ and supplyÂ modelÂ andÂ otherÂ appropriateÂ microeconomicÂ toolsÂ youÂ have learned in this unit to illustrate your argument. b.Â WhoÂ boreÂ aÂ greaterÂ burdenÂ ofÂ theÂ tax,Â theÂ buyersÂ orÂ sellersÂ of Alcops? Was the outcome of the tax efficient? c.Â WhatÂ otherÂ policyÂ couldÂ theÂ governmentÂ implementÂ toÂ reduce teenageÂ bingeÂ drinkingÂ andÂ alcohol-relatedÂ harmÂ and hospitalization? Explain. Price (dollar per tonne) Quantity demanded (kilo tonnes) Quantity supplied (kilo tonnes) 100Â 2,000Â 0 150Â 1,400Â 600 200Â 1,200Â 800 250Â 1,000Â 1,000 300Â 800Â 1,200 350Â 600Â 1,400 400Â 0Â 2,000 3.Â TheÂ tableÂ showsÂ theÂ demandÂ andÂ supplyÂ schedulesÂ forÂ USÂ wheat market.Â The US Farm Bill 2012 indicates that the domestic price of wheatÂ willÂ beÂ setÂ atÂ $300Â perÂ tonne,Â whichÂ isÂ aboveÂ theÂ market equilibrium level of $250 per tonne, in order to support for domestic wheatÂ growers.Â Â AtÂ theÂ marketÂ equilibrium,Â 1,000Â kiloÂ tonnesÂ (Kt) are supplied. a.Â The US Farm Bill 2012 indicates that the domestic price of wheat is set at $300 per tonne, which is above the market equilibrium level of $250 per tonne, in order to support for domestic wheat growers. On a graph, show if it creates a shortage or a surplus in the market for wheat, and explain why and by how much. b.Â OnÂ aÂ graph,Â explainÂ howÂ theÂ priceÂ controlÂ inÂ theÂ USÂ wouldÂ change the consumer surplus, producer surplus, and deadweight loss in the domesticÂ wheatÂ market.Â AssumeÂ that the USÂ doesÂ notÂ tradeÂ wheat internationally.Â Also,Â calculateÂ theÂ changesÂ inÂ consumerÂ surplus, producerÂ surplusÂ andÂ deadweightÂ loss.Â (RememberÂ 1Â kiloÂ tonneÂ = 1,000 tonnes) c.Â Is the outcome of the US Farm Bill fair? critically discuss.