QUESTION #1: Using demand and supply curves, show the effect of each of the following on the market for cigarettes:
a. A cure for lung cancer is found.
b. The price of cigars increases.
c. Wages increase substantially in states that grow tobacco.
d. A fertilizer that increases the yield per acre of tobacco is discovered.
e. There is a sharp increase in the price of matches, lighters, and lighter fluid.
f. More states pass laws restricting smoking in restaurants and public places.
QUESTION #2: What happens to the equilibrium price and quantity of ice cream in response to each of the following? Explain your answers.
? The price of dairy cow fodder increases.
? The price of beef decreases.
? Concerns rise about the fat content of ice cream. Simultaneously, the price of sugar (used to produce ice cream) increases.