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Electric vehicles will help to reduce climate-damaging ... ... drive towards a net-zero emissions economy.
Source (adapted): https://www.transport.govt.nz/area-of-interest/environment-and-climate-change/electric-vehicles-programme/
One way to encourage more consumers to choose electric vehicles instead of petrol is to provide a subsidy or rebate for the purchase of electric vehicles.
Use the labels from Graph One to identify the:
change in consumer surplus
change in producer surplus
total cost to the Government
deadweight loss
Another way to encourage more consumers to switch to electric vehicles is to place an indirect tax on petrol vehicles.
Use the labels from Graph Two to identify the:
change in consumer surplus
change in producer surplus
total tax revenue collected by the Government
deadweight loss
Compare and contrast the impacts of a subsidy on the market for electric vehicles with a tax on the market for petrol vehicles. Refer to Graph One and Graph Two in your answer, and explain:
How each of the two policies would impact consumer surplus.
How each of the two policies would impact allocative efficiency.
How each of the two policies would impact the Government.
Why a combination of the two policies might be more financially sustainable in helping the Government’s goal of encouraging more consumers to buy electric instead of petrol vehicles.
The cost of renting a home in New Zealand has continued to rise. The decrease in supply of homes to rent has made this increase worse.
On Graph Three above, use dotted lines and labels to show the:
How would equilibrium be restored in the rental housing market? Refer to the relevant labels from Graph Three and the concept of market forces in your explanation.
One way the Government could stop rents from rising is by imposing a maximum price or rent control.
On Graph Four above, show a maximum price (rent) control set at $500 per week. Label the price (rent) Pmax.
Use data in Graph Four to complete Table One, below.
Compare and contrast the impacts this maximum price (rent) control has on consumers, producers, and allocative efficiency. Refer to Graph Four and Table One, and explain:
How the maximum rent control impacts consumer surplus.
How the maximum rent control impacts producer surplus.
How the maximum rent control impacts allocative efficiency.
Import tariffs of 5% and 10%... ...This increases overall efficiency.
Sources (adapted): https://www.mbie.govt.nz/business-and-employment/business/trade-and-tariffs/tariffs-in-new-zealand/ https://www.mbie.govt.nz/assets/5a90aac8bd/cabinet-paper-import-tariff-levels-after-2017.pdf
Use the labels from Graph Five and Graph Six to complete Table Two, below.
Compare and contrast the impact on producers and consumers of removing the tariff on goods that are price elastic. Refer to Graph Five and explain:
How the removal of the tariff impacts consumer surplus.
How the removal of the tariff impacts producer surplus.
How the removal of the tariff impacts the Government.
Compare and contrast the impact on allocative efficiency of removing the tariff from goods that are price elastic rather than inelastic. Refer to Graph Five and Graph Six, and explain:
Why there are gains in allocative efficiency when tariffs are removed from imported goods regardless of their price elasticity of demand.
Why removing tariffs from price elastic goods rather than inelastic goods would lead to higher allocative efficiency gains.