Discuss the below in a 500 words each:
Question 1: Economic surplus
(a) Economists use economic surplus as a criterion of desirability (i.e. a situation where economic surplus is maximised is more desirable than one where it is not). Define "economic surplus", using a diagram of demand and supply curves in a particular market to illustrate your answer.
(b) At what output is economic surplus maximised? Explain why it is at this point.
Question 2: The competitive market
(a) What are the special characteristics necessary for the existence of a perfectly competitive market?
(b) Discuss if these characteristics are often achieved in the real world.
Question 1: The terms of trade
a) What do we mean by the terms of trade?
b) How have changes in the terms of trade, in the long term, affected farm incomes in Australia?
Question 2: Pollution control
Using a series of bullet points and brief explanations list the advantages and disadvantages of using standards or economic instruments (e.g. taxes or emissions trading schemes) to control pollution.