1. [2 points] suppose that the market for cigarettes in the town of lung Cancer can be expressed as : Qs = P and Q = 100 - 2P.~ The quantity id measured in thousands. Suppose that the town council needs $500,000 in additional revenue to pay for the extra health care expenses of high lung cancer rates. They have decided to tax the cigarette market. ~ a. What would be the excise tax levied on cigarettes to generate this revenue? ~ b. How much would cigarette consumption drop? ~ 2. [4 points] In a perfectly competitive market, the demand curve is Q=200-3P and supply is Q=10P. ~ a. Find the market equilibrium. a. A price ceiling of P=$2 is placed in the market. Find the new equilibrium. Is a surplus or shortage created? What is its size? ~ b. Find the change in consumer, producer surplus and dead weight loss. a. Could a rationing system be used? At what level? ~ 3. [4 points] read the following article. ~ https://www.bloomberg.comews/articles/2020-05-14/turmoil-in-canada-5- food-supply-chain-points-to-summer-shortages?sref=5A9bWqiY a. Identify the impact from higher labour cost (or shortages) in a demand supply graph. ~ b. Identify the shortage. C. Proposed a policy which could help food prices. Equally talk of the impacts which your policy will have, which may not be very positive. ~