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1. Why do governments subsidise energy-efficient heating/cooling appliances and why do they tax more polluting industries? Using incentive theory, explain this economic policy.
2. Let's suppose that after high school you decide to take a 5-year medical course when you could have started work at $2,000/month. Assuming that the cost of your studies is $15,000/year, but that once you've graduated you'll be earning $4,000/month. How long will it take you to be economically profitable, explain using the concept of opportunity cost in this context.
3. In the case of vaccination, why is it economically rational to increase population coverage beyond the private will to do so? Using the concept of externality and private/social supply and demand to explain the case.
4. The director of the city hospital has been provided with a cost benefit analysis of lung transplantations. TC and TB being total cost and total benefit respectively, fill in for average cost (AC), average benefit (AB), marginal cost (MC) and marginal benefit (MB), round at one decimal place.
5. Explain what a public good is and answer the question of whether health is one. Use introduction and conclusion.
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