Exam case studies

Question 1

Example for elastic PED

Answer 1

kit kat chocolate bar

Question 2

Example for inelastic PED

Answer 2

Cigarettes in indonesia - highly addicted population 34% of population

Question 3

Income elastic good

Answer 3

Porshe sports car

Question 4

Income inelastic

Answer 4

Maizmeal in africa

Question 5

Inferior goods

Answer 5

Milk power in africa

Question 6

Elastic supply

Answer 6

Colcaccio restaurant during covid, operating at around 50% capacity

Question 7

Inelastic supply

Answer 7

Nuclear power in the uk costs around 22 billion pounds

Question 8

Legislation Negative Externality Consumption

Answer 8

South Africa created a regulation imposing a 52% sales tax (VAT) on Cigarettes (also Pigouvian)

Question 9

Negative advertising

Answer 9

In 2013 the UK launched a new advertising campaign which uses graphic images of polluted blood flowing through the body in an attempt to urge smokers to quit.

Question 10

Pergovian Tax

Answer 10

South africa 28% alcohol tax

Question 11

NEP Carbon tax

Answer 11

Canada has a carbon tax of $40 per ton of CO2 emissions.

Question 12

NEP Legislation

Answer 12

South Africa Air Quality Act of 2005 to prevent pollution.

Question 13

Subsidies

Answer 13

The US Subsidizes non- profit hospitals; $50 billion dollars; and provides a tax exemption worth of 25b.

Question 14

Government provision

Answer 14

UK are providing free covid 19 vaccinations to its entire population.

Question 15

PEC legislation

Answer 15

In 2009 Portugal made education (including Universities and schools) free and compulsory until the age of 18.

Question 16

PEP Subsidies

Answer 16

The US provides $85 billion dollars for nuclear power research.

Question 17

Government Provision

Answer 17

In 2020 the Portuguse government invested 150 euros/ per hectare per year for the plantation of trees

Question 18

Unsuccessful price cieling

Answer 18

USA 1970s gasoline price ceiling at $1.00 per gallon, market $1.20 per gallon. (price shocks)
Cause shortage -> non price rationing (only certain license plates were allowed to refill on certain days) -> concluded public worse off