Question 1 {10 marks) Work fiom home and stay at home restrictions impacted the markets of many household items= with discussions about toilet paper making nations and even international news.

Question 1 {10 marks) Work fiom home and stay at home restrictions impacted the markets of many household items=
with discussions about toilet paper making nations and even international news. (a) ‘ impact did COVE—19 restrictions have on the market for household toilet paper?I
Explain using a supply and demand diagram. (5 marks) {13) States enacted policies that prevented price gouging during the coronavinis crises.
Explain the impact of this policy on this market. (5 marks] Question 2 {10 marks) Consider the market for medical services when there is no health insurance using a demand
supply framework with properly labelled graphs. Show how the availability of health insurance is likely to afl’ect this market. Clearly explain
how the demand or supply or both curves will shift. Discuss the impact on the market
equilibrium quantity and prices. Explain why patients pay highen’lower prices than before. Question 3 {15 marks) Suppose due to the deepening crisis in the Ivliddle East= there is a hike in the crude oil price.
Using a demand—supply fi’ameworlg model the effects of a crude oil price hike on (a) the petrol market= (h) the 1% car market and (c) the small car market Question 4 {5 marks) Suppose the lvlachine rental rate decreases from $20 perhour to lilfl per hour: while the rental
rate of labour remains at $30 per hour. Show using a labelled Isoquant—isocost diagram what
happens {before and after} to the minimum-cost combination for producing shoes. Does the production process become more or less capital intensive (Le.= higher or lower K-L
ratio)? Will the capital intensity (K—L ratio) of production change if, in addition, non.r the rental rate of labour decreases to $15 per hour?I

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