Problem 1. Can you illustrate by using supply and demand graphs what happens to the equilibrium price and quantity in each of the following situations. Please dont forget to label the graphs.
a. A rise in the price of tea on the market for coffee.
b. Expectations of higher prices on the market for housing.
c. A decline in the price of gas on the market for small cars.
Problem 2. If we suppose that the market price for cigarettes is $2.00. A tax of 20 cents per package is imposed. The consumer pays 15 cents of the tax and the producer pays 5 cents of the tax Could you illustrate this with a supply/demand graph?
Problem 3. If the current market rent for a one bedroom apartment in Vancouver is $500.00. An increase in demand will increase market rents to $600.00. The provincial goverment intervenes to control rents at $ 500.00. Can you illustarte this situation with a supply/demand graph.