Microeconomics A Contemporary Intro
10th Edition
ISBN: 9781285635101
Author: MCEACHERN
Publisher: Cengage
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A government of a country X would like to administer two programs that affect the market for cigarettes. Media campaigns and labeling requirements are aimed at making the public aware of the dangers of cigarette smoking. At the same time, the Department of Agriculture maintains a price support program for tobacco farmers, which raises the price of tobacco above the equilibrium price.
1- How do these two programs affect cigarette consumption?
2- Use a graph of the cigarette market in your answer.
3- What is the combined effect of these two programs on the price of cigarettes?
4- Cigarettes are also heavily taxed. What effect does this tax have on cigarette consumption?
Question 16
Refer the to graph below to answer Questions 16-18
In the graph above, if the minimum price is set at P1, what area(s) represent the producer surplus after the implementation of this policy?
Question 16 options:
a)
Areas B+C+E+F
b)
Areas B+E
c)
Areas E+F
d)
Area E
e)
Area B
Question 17
In the graph above, if the minimum price is set at P1, what will limit the quantity of the good that is sold?
Question 17 options:
a)
Demand
b)
Supply
c)
A government quota
d)
Consumer surplus
e)
Producer surplus
Question 18
In the graph above, if the minimum price is set at P1, what area(s)…
Consider a poor country confronting the rising price of eggs, an important food source for the population. The government considers imposing a price ceiling to keep the price of eggs at an affordable level for the population. The price ceiling would cause the following...
Group of answer choices
At the new price, fewer egg producers would supply the market and there would be fewer eggs available on the market.
The quantity of eggs demanded and supplied to the market would rise and the market would reach a new better equilibrium
The market will get the signal that more eggs are needed and more producers will join the market to raise production.
The population would be able to afford more eggs and improve their situation.
Knowledge Booster
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