Problem
1. How does a tax affect consumer and producer surplus? Why does a tax create a deadweight loss?
2. What is the tax incidence? What factors determine the tax incidence?
3. What is a subsidy?
4. How does a subsidy affect consumer and producer surplus?
5. Why does a subsidy create a deadweight loss?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.