1)

a. In a supply and demand diagram for the market for peanut butter, show the effects of 1) an increase in the price of grape jelly while 2) a drought severely impacts peanut production. Label all pertinent parts of the graph and determine the impact on the equilibrium price and quantity.

b. In a supply and demand diagram, show a binding price floor. Then, with the original price floor imposed and unchanging, show the impacts to this market of an increase in technology. Label all pertinent parts of the graph and be exceedingly clear about the effects to this market.

c. In a supply and demand diagram for the market for highlighters, show the impact of a unit tax on the buyers of highlighters. Label all pertinent parts of the graph and be exceedingly clear about the effects to this market. Do you know which side of the market bears the higher actual burden of the tax? Why or why not?